USD/CAD falls as Canada boosts defense spending amid US trade deal hopes
USD/CAD has declined 0.4% to 1.4350 as Canada officially announced a significant increase in defense spending to 2% of GDP, meeting NATO targets five years ahead of schedule. Prime Minister Mark Carney detailed investments in submarines, aircraft, ships, armed vehicles, and radar systems, with spending set to continue rising in coming years. This announcement follows last week's signals suggesting Canada and the US are nearing a comprehensive trade agreement, which could further strengthen the Canadian dollar. The defense spending commitment appears strategically timed to facilitate smoother trade negotiations with the US administration. Technical indicators show USD/CAD breaking below the 1.4400 support level, with next support at 1.4300. A successful trade deal announcement could drive the pair toward 1.4200, while any delays might see a rebound to 1.4450 resistance.
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