Monday, June 30, 2025 8:10 PM EDT
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- USD/CAD posts modest losses around 1.3605 in Tuesday’s early Asian session.
- US and Canada to resume trade talks after Ottawa drops digital tax.
- Canada's government expects to reach an economic deal with the US by July 21.
The USD/CAD pair trades with mild losses near 1.3605 during the early Asian session on Tuesday. The Canadian Dollar (CAD) strengthens against the US Dollar as trade negotiations between the United States and Canada resume. Traders will keep an eye on the US June ISM Manufacturing Purchasing Managers Index (PMI) data, which is due later on Tuesday. The Canadian stock market will be closed on Tuesday for Canada Day.
On Monday, White House economic advisor Kevin Hassett said that the US would immediately begin trade talks with Canada after the latter removed its digital services tax, which targeted US technology companies. Canada suspended its plans to begin collecting a new digital services tax targeting US technology firms just hours before this was due to start on Monday in a bid to advance stalled trade negotiations with the US.
Canada's finance ministry said that Canadian Prime Minister Mark Carney and US President Donald Trump would resume trade negotiations in order to agree on an agreement by July 21. The positive development surrounding trade talks provides some support to the CAD and creates a headwind for the pair.
Meanwhile, Crude Oil prices as investors weighed easing Middle East risk and prospects of an OPEC+ output increase in August. This, in turn, could weigh on the commodity-linked Loonie lower and cap the downside for the pair. It’s worth noting that Canada is the largest oil exporter to the US, and lower crude oil prices tend to have a negative impact on the CAD value.
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Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any ...
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