USD/CAD spikes 1.2% to 1.4450 on Trump's 35% Canada tariff announcement

USD/CAD experienced its sharpest single-day gain in three months, surging 170 pips to 1.4450 following Trump's announcement of a 35% tariff on Canadian imports. The dramatic move pushed the Canadian dollar to its weakest level since March 2024, with the loonie losing ground against all major currencies. Market analysts expect the Bank of Canada may need to accelerate rate cuts to offset the economic impact, potentially widening the rate differential with the Fed. Technical analysis shows USD/CAD broke above the critical 1.4300 resistance level with conviction, opening the path toward 1.4500 and potentially 1.4600. The RSI indicator entered overbought territory at 72, suggesting possible near-term consolidation. However, fundamental pressures remain heavily CAD-negative as Canada's export-dependent economy faces significant headwinds. Traders are monitoring Ottawa's response, with retaliatory measures likely to escalate trade tensions further.