**USD/CAD Hits Lows Near 1.3600 as Markets Eye Trump’s Tariff Warning and Oil Prices Climb**
*By FXStreet (Original Author: Kerian Pinter). Enhanced and Expanded Article by AI Writer, based on the original reporting*
The USD/CAD currency pair continued its downward momentum, edging closer to the 1.3600 mark during Thursday’s late trading session on July 22, 2025. Investors increasingly pulled away from the US Dollar due to rising geopolitical and economic tensions, while commodity-linked currencies like the Canadian Dollar received a boost from climbing crude oil prices. A major focal point for market participants was the looming tariff deadline promised by former US President Donald Trump, which added volatility and risk aversion to currency markets.
### Key Takeaways:
– USD/CAD extended its daily decline to approach 1.3600 amid heightened trade and political uncertainties.
– Oil prices surged, acting as a tailwind for the Canadian Dollar due to Canada’s economic dependence on commodity exports.
– Former US President Donald Trump’s threat of tariffs on Chinese goods created jitters across global equity and currency markets.
– Incoming US economic data and Federal Reserve commentary added further downward pressure on the USD.
– The USD Index (DXY) hovered near weekly lows, contributing to further softness in the greenback.
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### USD/CAD Slippage Explained
The USD/CAD pair slipped another leg lower as risk appetite faltered and safe-haven demand for the US Dollar diminished in face of growing geopolitical risks. Earlier in the North American session, the pair briefly broke below a key technical area near 1.3630 and continued its descent toward significant psychological support at 1.3600.
Several forces are driving the renewed bearish momentum in USD/CAD:
– **Rising Oil Prices**: Crude oil prices jumped to multi-week highs. West Texas Intermediate (WTI) crude gained more than 2% on the day, with prices trading around $83 per barrel. Since oil is one of Canada’s chief exports, higher oil prices generally support the Canadian Dollar.
– **Political Uncertainty & Pro-Protectionist Rhetoric**: Trump’s fiery comments regarding potential tariffs on $300 billion worth of Chinese imports revived trade war fears. Markets are unsure how such policies might evolve under a future Trump administration, damaging sentiment toward the US Dollar.
– **US Dollar Weakness**: Broader softness in the US Dollar was observed across G10 currencies. The US Dollar Index (DXY) remained on the back foot, retreating below 105.00 for the first time in over a week. This decline added fuel to the downward move in USD/CAD.
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### Trump’s Tariff Warning Heightens Investor Caution
In a televised interview earlier in the week, former President Donald Trump stated that if re-elected, he would implement sweeping tariffs on Chinese imports. He also noted that he was considering uniform tariffs of 10% on most imported goods, while up to 60% tariffs could be issued specifically against China.
This rhetoric transported markets back to 2018-2019, when tariff escalations between Washington and Beijing led to massive risk-off moves and disrupted global trade flows. For traders and investors, the risk of renewed global trade fragmentation plays a key role in currency decisions.
**Impact on USD and CAD:**
– Trump’s protectionist language tends to reduce investor demand for US-denominated assets.
– Safe-haven demand shifted somewhat to gold and the Swiss Franc, while commodity currencies like the Canadian Dollar benefited from higher energy prices.
– A shift in monetary and fiscal policy expectations followed, with traders speculating on a more defensive posture by global central banks in the face of slower trade growth.
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### Canada’s Economic Resilience Supports the Loonie
The Canadian Dollar’s strengthening is not solely about US weakness. Domestically, Canada’s economic picture has shown relative robustness:
– **Stable Employment Figures**: Canada’s latest
Read more on USD/CAD trading.