Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3720-1.3970
Euro 1.6030 -1.6280
Sterling 1.8760 -1.9010
WTI Oil (opening level) $87.51
The CAD/USD is opening at 1.3849 ( 0.7221 )
The CAD is under pressure against the USD following the breakdown of US–Canada trade talks and the introduction of new tariffs. Rather than signalling a full-scale trade war, the latest developments highlight a difficult stage in ongoing negotiations between two deeply integrated trading partners.
The new tariffs and Canada’s planned response are likely to keep uncertainty elevated in the near term, with trade policy remaining an important driver for the Canadian dollar. If tensions persist and negotiations remain stalled, USD/CAD could move back toward the 1.40 level or higher.
In the short term, initial resistance emerges at the 100-day SMA at 1.3915, followed by 1.3940, with the upper Bollinger band at 1.4135 acting as a stronger cap if a rebound extends. On the downside, immediate support is seen around 1.3745, and a sustained break below this floor would open the way for further losses, keeping the pair anchored in its bearish bias.
Headlines
· US Treasury Secretary Scott Bessent vowed the “toughest” sanctions in history against Iran, aiming to intensify economic pressure on the country and its trading partners. The move could further tighten global oil supplies, with Iranian exports already disrupted and offers to China reduced. Tehran dismissed the threat, saying it can withstand sanctions and maintain trade elsewhere, while tensions in the Strait of Hormuz remain high and traffic is still below normal.
· US–Canada trade talks collapsed on Friday, with disagreements over tariffs on Canadian medium- and heavy-duty vehicles among the key sticking points. The new 50% US tariffs on around USD 20 billion of Canadian goods have now taken effect, prompting Prime Minister Mark Carney to vow a dollar-for-dollar response on selected US goods from September 8. US Trade Representative Jamieson Greer said no new talks are currently planned and that Washington is instead preparing measures in response to Canada’s retaliation.
· The US flash S&P Global Composite PMI rose to 56 in August 2026 from 54.5 in July, the strongest since April 2022. Faster services growth offset softer manufacturing, where output rose at the weakest pace in 13 months amid supply issues. Backlogs increased as delivery times lengthened. Hiring grew at the fastest rate since early 2025 and confidence hit a nine-month high. Selling price pressures eased, though input costs remained elevated on higher energy prices.
· The week carries two outsized catalysts. Nvidia reports second-quarter results on Wednesday 26 August after the US close, in our view the largest scheduled test of the AI trade this month. The Jackson Hole symposium then runs from 27 to 29 August, with Chair Kevin Warsh delivering the keynote on Friday 28 August, the same session that brings the US personal consumption expenditures report. Today itself is quiet, with no scheduled US data and no US corporate reporting.
Key Points
· Macro: Washington readies fresh Iran sanctions as a heavy week of catalysts begins
· Equities: US and European shares rebounded Friday, while Asian equities fell Monday as Samsung and Alibaba pressured technology stocks.
· Digital Assets: Fund demand carried the large proxies while the miners went their own way
· Commodities: Oil trades lower before new sanctions while bullion extended its run
· Fixed Income: US treasury yields remain near cycle highs at long end. German-France yield spread in focus as France 10-year yield at 17-year high.
· Currencies: Major currencies sluggish, AUD jumped higher Friday.