USD/CAD Dips Below 1.3700 as Canada Resumes Trade Talks with US

USD/CAD Dips Below 1.3700 as Canada Resumes Trade Talks with US

Canadian Dollar Rebounds on Trade Optimism

The USD/CAD pair reversed from highs above 1.3750 to reach 1.3650 in early Monday trading, driven by renewed investor confidence in the Canadian Dollar (CAD). The rebound came after Canadian Prime Minister Mark Carney confirmed on Sunday that trade negotiations with the US will resume this week, following Canada’s withdrawal of the controversial digital services tax.

US Dollar Remains Weak Amid Fed Rate Cut Bets

The US Dollar (USD) continues to weaken across the board as traders price in earlier interest rate cuts from the Federal Reserve. This, along with a risk-on market sentiment supported by easing geopolitical tensions and trade progress, has further pressured the USD/CAD pair downward.

Outlook: Key Levels and Market Focus

Despite last week’s weak Canadian GDP data and a decline in crude oil prices, the Loonie remains resilient. Oil prices, which heavily influence CAD due to Canada’s export economy, are being closely watched by investors.

The USD/CAD is currently testing support near 1.3650, with resistance seen around 1.3700–1.3750.

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