The US dollar fell significantly today amid tensions over a trade war stemming from the US president's proposal to impose a new tariff on steel imports at 25% and aluminum at 10%. The dollar index fell from a daily high of 90, currently trading at 89.60.
Trump faced more political and diplomatic pressure including from US companies to give up the proposals because of their adverse results, but he remains steadfast. The US president is scheduled to meet with company executives to discuss tariff proposals.
The Canadian dollar was also affected by these proposals. Canada is the main supplier of steel and aluminum to the United States, and continued its decline against the US dollar through yesterday's trading to take USDCAD to its highest level since July 5 at 1.2999 before declining currently at 1.2920 levels.
Markets are awaiting tomorrow's meeting of the Bank of Canada, which will be crucial in determining the direction of the Canadian dollar in the coming period, and despite recent developments, the bank remains on track to leaving the door open for further rate hikes this year.
