Canadian Dollar tests fresh multi-month highs to kickstart June markets

• The Canadian Dollar briefly tested a fresh six-month high against the Greenback on Monday.
• June market trading kicked off with a fresh bout of US selling pressure as tariff concerns weigh on US sentiment.
• The BoC's latest rate call, slated for this week, is expected to see a hold on rates for now.

The Canadian Dollar (CAD) caught a fresh bid against the US Dollar (USD), with June's market window kicking things off with a fresh six-month peak in intraday Loonie bids against the Greenback. The Trump administration has hit high gear on tariff moves, sparking a fresh round of risk aversion that is keeping the US Dollar under pressure.

The Bank of Canada's (BoC) latest rate call is slated for Wednesday. The BoC is broadly expected to slow down its frenzied pace of rate cutting, with policymakers expected to hold off on further rate trims in June. On the US side, the Trump administration has imposed an arbitrary deadline of this Wednesday for trading partners to deliver their best deals to Trump's desk, or risk facing April's "reciprocal tariffs" getting re-imposed in July.

Daily digest market movers: Ongoing trade tensions give the Canadian Dollar a fresh leg up

• The Canadian Dollar saw its highest close against the US Dollar in six months, keeping the USD/CAD pair trapped near 1.3700.
• The ongoing legal battle over Trump's tariffs has deepened, after the US Court of International Trade petitioned the federal appeals court to strike down Trump's sweeping tariffs until Trump's appeal of the USCIT ruling is finished.
• The Trump administration, facing obstacles from the courts, has kicked tariff action into high gear.
• Trump has announced a doubling of tariffs on all imports of steel into the US, pushing the import tax from 25% to 50%. The US is an aggregate importer of steel, and will likely be forced to pay higher prices across the board as US industry has no alternatives but to face increased import costs head on.
• The Trump administration is reportedly preparing to tell trading partners that they have until Wednesday to deliver their best trade deal offer to the Trump team. With no concrete trade deals on the table, this is unlikely to produce meaningful results.

Canadian Dollar price forecast

The Canadian Dollar briefly tested fresh six-month lows on Monday, kicking off the June trading month on a high note. However, a near-term floor supporting the Greenback remains in place, keeping USD/CAD bolstered on the high side of 1.3700 for the time being. Still, the Canadian Dollar eked out its highest close against the US Dollar since last October, and USD/CAD is poised for a continued push to the low end.

USD/CAD daily chart