USD/CAD Flat at 1.3700 as US-China Trade Talks Progress

USD/CAD Flat Near 1.3700 as US-China Trade Talks Show Progress

Forex Market Update – June 10, 2025

The USD/CAD pair continues to hover around 1.3700 during the early Asian session on Tuesday, reflecting market caution as investors await outcomes from ongoing US-China trade negotiations. With talks now entering their second day, global markets are closely monitoring the tone and direction of the discussions.

Trade Tensions Easing: Positive for the Greenback?

A US official stated that both countries are making headway, and Washington has shown openness to lifting certain tech export restrictions. In return, China is expected to ease its curbs on rare earth shipments. This mutual softening could lead to an improved trade environment, providing potential upside for the US Dollar (USD).

Strong US Jobs Data Adds Support to USD

Adding to the Greenback's support is the better-than-expected US May employment report, which surprised to the upside. The strong labor market data has led market participants to believe that the Federal Reserve is more likely to maintain current interest rate levels through its September meeting.

Related reading: How Fed Rate Decisions Impact Forex Markets

Market Implications for USD/CAD

With both geopolitical easing and positive economic signals backing the US Dollar, the USD/CAD pair may find room to edge higher if trade talks continue to trend positively. Conversely, any breakdown in negotiations could revive risk aversion and pressure the USD.

Conclusion

The USD/CAD is currently in a holding pattern at 1.3700, awaiting clearer signals from the US-China trade front and any additional commentary from the Federal Reserve. Traders should remain alert for news developments that could provide momentum in either direction.