USD/CAD Steady Near 1.3700 as US-China Trade Tensions Ease and Oil Prices Support CAD

USD/CAD Hovers Around 1.3700 as Trade Tensions Ease and Oil Supports CAD

Forex Market Update – June 10, 2025

The USD/CAD currency pair is trading steadily near the 1.3700 level during early Asian hours on Tuesday. A combination of softened US-China trade tensions, improved risk sentiment, and robust US labor data is supporting the US Dollar (USD), while stronger oil prices underpin the Canadian Dollar (CAD).

US-China Trade Talks Show Progress

US Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick characterized Monday’s trade talks as “good” and “fruitful,” suggesting an improving tone in bilateral negotiations. The second round of meetings between US and Chinese officials is scheduled for Tuesday in London, with discussions expected to focus on tech exports and rare earth elements.

Also Read: How US-China Trade Relations Drive Currency Markets

This shift in tone has boosted investor confidence, limiting safe-haven flows and reinforcing risk-on sentiment, thereby supporting USD/CAD’s recent upward move.

Stronger US Data and Fed Outlook Boost the Greenback

Friday’s better-than-expected US Nonfarm Payrolls (NFP) report reduced market expectations for immediate Federal Reserve rate cuts. Futures markets now favor unchanged rates through September, offering continued support for the USD.

Traders are now focused on next week’s US Consumer Price Index (CPI) report, which could influence Fed sentiment and provide clues about a potential monetary pivot.

Oil Prices Help Anchor the CAD

The Canadian Dollar is also receiving support from rising oil prices, with WTI crude hovering near $64.65—a nearly seven-week high. As a commodity-linked currency, the CAD tends to benefit from oil price gains, helping to keep USD/CAD upside in check.

Related Insight: WTI Oil Price Rises Amid Trade Talks and Geopolitical Tensions

Key USD/CAD Technical Levels

• Support: 1.3660, 1.3625
• Resistance: 1.3735, 1.3770

A sustained hold above 1.3700 could signal further bullish momentum, though traders remain cautious ahead of next week’s CPI report.

Conclusion

USD/CAD remains buoyant around 1.3700 as trade optimism and firm US data support the USD. Meanwhile, rising oil prices provide a buffer for the CAD. Upcoming CPI inflation data will be pivotal for the Fed’s next move and the pair’s near-term direction.