USD/CAD slips 0.2% as Canada eliminates digital services tax

USD/CAD declined 0.2% to 1.3650 during Monday's Asian session following Canada's surprise announcement to eliminate its digital services tax, removing a potential trade friction point with the United States. The Canadian dollar strengthened across the board as the policy shift signals improved bilateral trade relations and reduces regulatory uncertainty for tech companies operating in Canada. The move comes amid broader risk-on sentiment in Asian markets, with commodity currencies gaining ground. Oil prices remained steady near $81 per barrel, providing additional support for the loonie. Technical analysis shows USD/CAD breaking below the 1.3680 support level, with next targets at 1.3620 (50-day moving average) and 1.3600 psychological support. The pair's near-term direction will likely depend on upcoming US economic data and any further Canadian policy announcements. Traders should monitor resistance at 1.3700 for potential reversal signals.