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• USD/CAD may regain its ground amid rising tariff uncertainty between the United States (US) and Canada.
• Canadian Prime Minister Mark Carney stated that trade negotiations between the two countries have entered an intense phase.
• The Fed is widely expected to keep the benchmark interest rate steady between 4.25% and 4.50% in July.

USD/CAD halts its three-day winning streak, trading around 1.3740 during the Asian hours on Tuesday. The pair may further appreciate as the Canadian Dollar (CAD) could struggle amid rising tariff uncertainty between the United States (US) and Canada.

Canadian Prime Minister Mark Carney told reporters on Monday, reiterating that an agreement without any tariffs at all was unlikely. Carney said that talks between the two countries on a trade deal are at an intense phase. “It's a complex negotiation,” “we will only sign a deal that's the right deal,” he added. The US and Canada are working to reach an agreement by August 1, as US President Donald Trump is threatening to impose a 35% tariff on some Canadian imports.

The US Dollar (USD) gains ground after the United States and the European Union (EU) reached a trade agreement last week, setting 15% tariffs on most European goods, taking effect on August 1. Additionally, traders keep their eyes on further developments in the US-China trade talks. The discussions are set to resume on Tuesday, following over five hours of negotiations between top economic officials from both nations in Stockholm on Monday.

The US Federal Reserve (Fed) is widely expected to keep the benchmark interest rate steady between 4.25% and 4.50% at its July meeting. The FOMC press conference will be observed for any signs that rate cuts may start in September.

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