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The U.S. dollar maintained its upward momentum against the Canadian dollar on Wednesday, with USD/CAD trading around 1.3840 during the Asian session. The pair extended its gains for a third consecutive day, supported by heightened risk aversion after fresh tariff threats from U.S. President Donald Trump.
Speaking at the United Nations General Assembly on Tuesday, Trump warned that Washington was prepared to impose “a very strong round of tariffs” on Russia if it failed to end the war in Ukraine. He also criticized European countries for continuing to purchase Russian energy, accusing them of “funding their own war,” and called on the European Union to work with the United States to enforce tariffs more effectively.
The dollar’s safe-haven appeal grew amid geopolitical tensions, though its advance was tempered by weaker U.S. economic data. The latest S&P Global Purchasing Managers’ Index showed signs of slowing momentum in the private sector. The composite PMI slipped to 53.6 in September from 54.6 in August, while the manufacturing PMI declined to 52.0 from 53.0. The services PMI also eased to 53.9 from 54.5, pointing to softer demand.
In Canada, Prime Minister Mark Carney acknowledged that the effects of U.S. tariffs were becoming increasingly visible, adding that trade discussions with Washington remained ongoing.
Meanwhile, Bank of Canada Governor Steve Makram emphasized on Monday the need for Canada to pursue a “more independent path” away from U.S. economic influence. He also highlighted concerns about political pressure on the Federal Reserve, noting that Trump’s attempts to sway monetary policy raised fresh questions about the central bank’s independence.
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