- USD/CAD appreciates as market sentiment weakens following fresh Trump tariff threats on Russia.
- Trump also condemned European nations for purchasing Russian energy, insisting they are “financing the war against themselves.”
- Canadian Prime Minister Mark Carney noted that the effects of US trade tariffs are becoming increasingly evident.
USD/CAD extends its winning streak for the third consecutive day, trading around 1.3840 during the Asian hours on Wednesday. The pair appreciates as the US Dollar (USD) receives support from increased risk aversion, driven by the fresh tariff threats from US President Donald Trump against Russia.
At the United Nations (UN) General Assembly on Tuesday, President Trump warned that the United States (US) is ready to impose a “very strong round of powerful tariffs” if Russia refuses to end the war in Ukraine. Trump also criticized European countries for buying Russian energy, arguing that “they are funding the war against themselves,” and urged the EU to join Washington in implementing tariffs to ensure their effectiveness.
However, the Greenback faced challenges following the release of US S&P Global PMI figures for September on Tuesday. Composite PMI ticked down to 53.6 from 54.6 in August, pointing to a private sector that seems to be struggling to strengthen further. Manufacturing PMI eased to 52.0 from 53, signalling waning momentum in the sector. Services PMI slipped to 53.9 from 54.5, suggesting demand there may be easing.
Canadian Prime Minister Mark Carney noted that ongoing impacts from Donald Trump’s trade tariffs are becoming more noticeable and acknowledged that trade discussions between the US and Canada are still ongoing.
Bank of Canada (BoC) Governor Tiff Macklem noted on Monday that Canada will need to continue charting a “more independent course” away from the US, citing the US Dollar’s recent performance across the market. Trump’s attempts to influence the Fed are raising questions about the continued independence of US monetary policy, Macklem added.
