USD/CAD Surges Higher as Tariff Deadline Threatens Canadian Dollar

USD/CAD has pushed higher, trading near 1.4400 levels as the Canadian dollar faces mounting pressure from impending US tariff threats. The looming August 1 deadline for potential trade restrictions has sparked risk-off sentiment, driving investors away from the commodity-linked loonie. Market participants are pricing in a 25% probability of new tariffs on Canadian exports, which could significantly impact Canada's trade-dependent economy. The Bank of Canada's recent dovish stance, maintaining its overnight rate at 4.25% while signaling potential future cuts, has further weakened CAD positioning. Technical indicators show USD/CAD breaking above the 1.4350 resistance level, with momentum indicators suggesting continued upside potential. The next major resistance sits at 1.4450, coinciding with January highs. Traders should monitor upcoming Canadian GDP data and any developments in US-Canada trade negotiations, as these could trigger volatile price swings in the pair ahead of the critical deadline.