USD/CAD Rises to 1.3650 on Trump Tax Bill and US Debt Concerns

USD/CAD has advanced 0.4% to 1.3650 as markets price in the increasing probability of Trump's proposed tax bill passing into law, raising concerns about ballooning US government debt. The tax proposal, which includes significant corporate tax cuts and stimulus measures, could add an estimated $2.5 trillion to the federal deficit over ten years. Despite debt concerns typically weakening a currency, the dollar has strengthened against the Canadian dollar due to expectations of increased economic activity and potential inflationary pressures that may keep the Federal Reserve hawkish. Oil prices, crucial for CAD strength, have remained stable around $78 per barrel, limiting support for the loonie. Technical indicators show USD/CAD breaking above the 50-day moving average at 1.3620, with next resistance at 1.3700. The pair's momentum suggests further upside potential, especially if US Treasury yields continue rising on fiscal expansion expectations, though any significant oil price rally could cap gains.