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USD/CAD corrects to near 1.3725 as the US Dollar struggles to extend its upside. Traders pare Fed dovish bets as prices of products that are imported to the US have increased. Trade tensions between the US and Canada have weighed on the Canadian Dollar. The USD/CAD pair is down 0.25% to near 1.3725 during the European trading session on Friday. The Loonie pair faces a slight selling pressure as the US Dollar (USD) retraces after failing to extend its two-week rally. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, corrects to near 98.30 from an over three-week high around 99.00. The US Dollar drops while investors seek fresh cues on trade talks between the United States (US) and the Eurozone. European Union (EU) trade chief Maros Sefcovic headed to Washington on Wednesday for fresh round of trade talks. Trade negotiations between both economies soured after US President Donald Trump imposed 30% tariffs on imports from the trading bloc last weekend. On the domestic front, growing market expectations that the Federal Reserve (Fed) will keep interest rates in the current range of 4.25%-4.50% for longer will continue to support the US Dollar. According to the CME FedWatch tool, the probability for the Fed to cut interest rates in the September meeting has reduced to 58% from 70.4% seen a week ago. Traders pared Fed dovish bets after the US Consumer Price Index (CPI) data for June showed that prices of goods rose that are largely imported. Meanwhile, the Canadian Dollar (CAD) trades lower among risk-perceived currencies amid trade tensions between the US and Canada. Over the weekend, US President Trump imposed 30% tariffs on imports from Canada, which are separate from sectoral levies.   US Dollar FAQs The US Dollar (USD) is the official currency…

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Filed under: News - @ July 18, 2025 2:28 pm