USD/CAD TRADES HIGHER NEAR 1.3850 DUE TO POTENTIAL DE-ESCALATION OF ONGOING TARIFF DISPUTE
USD/CAD TRADES HIGHER NEAR 1.3850 DUE TO POTENTIAL DE-ESCALATION OF ONGOING TARIFF DISPUTE
The USD/CAD currency pair has rebounded from two consecutive sessions of losses, trading near 1.3830 during Asian hours on Wednesday.
This upward movement is attributed to renewed support for the U.S. dollar following remarks by U.S. Treasury Secretary Scott Bessent.
U.S. Treasury Secretary Scott Bessent described the ongoing U.S.-China trade war as "unsustainable" and suggested that it would likely "de-escalate." He noted that while formal negotiations had yet to begin, a potential deal remained possible.
These comments were made at a private investor meeting hosted by JPMorgan Chase in Washington.
Following Bessent's remarks, U.S. financial markets experienced a rally.
The S&P 500 surged nearly 2%, and the Nasdaq Composite rose by 2.7%. The U.S. Dollar Index increased by 0.7%, reflecting renewed investor confidence.
The renewed strength of the U.S. dollar, bolstered by expectations of a de-escalation in trade tensions, has led to the USD/CAD pair trading higher near the 1.3850 level.
This marks a rebound from previous losses and indicates a shift in market sentiment.
Despite Bessent's optimistic outlook, the U.S. has imposed 145% tariffs on Chinese imports, and China has retaliated with 125% tariffs on American goods.
These high tariffs function as trade embargoes and have contributed to instability in financial markets, rising interest rates, and concerns about inflation and economic growth.
