Canadian Dollar falls for a fourth straight session as markets get tariff tunnel vision

• The Canadian Dollar backslid further on Monday, falling over 0.5% against the Greenback.
• Market sentiment is broadly catching a bid as tariffs dominate the headlines.
• Loonie markets are taking a backseat during a data-light week for the CAD.

The Canadian Dollar (CAD) fell further on Monday, shedding around one-half of one percent against the US Dollar (USD) as investors broadly bid up the Greenback after the Trump administration proudly announced that they would be walking back their own triple-digit tariffs on Chinese imports. Initial trade talks between the US and China over the weekend resulted in a 90-day reprieve from US tariffs on Chinese goods that reached 145% through April. The US will still be maintaining a 30% tariff on most Chinese imports, and China will be sticking to its own 10% tariff on goods imported from the US as the two countries agree to head to the negotiating table for further trade discussions in the coming months.

It's a thin showing on the economic data docket for the Canadian Dollar this week. The Loonie is poised to continue getting tossed around by general market sentiment. With the Greenback set to continue gaining ground across the board on recovering market sentiment, the CAD is exposed to further declines barring any significant shifts in market fundamentals.

Daily digest market movers: Canadian Dollar extends losses as market sentiment bolsters Greenback

• The Canadian Dollar fell 0.5% against the US Dollar, pushing USD/CAD up to the 1.4000 handle and putting the pair on pace to take a fresh run at the 200-day Exponential Moving Average (EMA) near 1.4030.
• US tariffs on Chinese goods are set to sink to 30% from 145% beginning on Tuesday.
• This week's economic data docket is overwhelmingly tilted toward the US Dollar this week, with strictly low-tier data releases for the Canadian Dollar scattered throughout the week.
• Key US Consumer Price Index (CPI) inflation data will land on Tuesday as markets keep an eye out for signs of sharp inflation spikes due to US trade tariffs.
• US Producer Price Index (PPI) inflation and Retail Sales figures loom ahead on Thursday.
• Median market forecasts are hoping for a turnaround in University of Michigan Consumer Sentiment Index figures to round out the week on Friday.

Canadian Dollar price forecast

A four-day (and counting) losing streak for the Canadian Dollar has pushed the USD/CAD pair back into challenge territory of key long-term moving averages, and the Loonie could be on pace to kick off another long-term move to the low end. Bullish rotations on the USD/CAD chart have tended to support a long-term bull trend on the chart that has persisted since mid-2021.

Despite odds tilting firmly in the Greenback's favor, technical oscillators have quickly pivoted into overbought territory, implying a reprieve in Greenback bidding could be on the cards before another leg higher.

USD/CAD daily chart