Canada-U.S. Trade Talks Stall as 35% Tariff Threat Looms

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3450-1.3690

Euro                 1.5800-1.6040

Sterling            1.8260-1.8510

WTI Oil (opening level) $64.85

The CAD/USD is opening at 1.3577 ( 0.7365 )

·    The US Dollar extends losses on a brighter market mood after the US-Japan trade deal.

·    Concerns about the failure of the negotiations between the US and Canada are likely to weigh on the CAD.

·    Oil prices remain depressed, which is another headwind for the Loonie.

The US Dollar extends its decline for the fourth consecutive day, with the Canadian Dollar supported by a brighter market mood, as the trade deal between the US and Japan provided some certainty about the outlook of global trade and boosted hopes of more such deals.

USD/CAD has extended its downtrend to levels below 1.3600. The pair has depreciated by about 1.20% over the last four trading days and is currently trading at 1.3585, drifting closer to the year-to-date lows of 1.3540, reached in mid-June.

Canada continues to negotiate with the US, aiming to avoid the 35% levy announced by US President Trump earlier this month. Hopes of a trade deal before the August 1 deadline, however, are scarce, as the positions of both countries seem to be stalled.

Prime Minister Mark Carney dampened hopes of an imminent breakthrough on Tuesday and suggested that Canada might leave the table without an agreement, as he refused the possibility of reaching a deal “at any cost”.

Apart from that, Crude prices keep trading lower on concerns that higher supplies from producer countries and lower demand amid global trade restrictions might lead to an Oil glut in the coming months. Canada is one of the world’s major Oil exporters, and these low prices are likely to act as headwinds for the Loonie.