USD/CAD holds positive ground above 1.3650 amid firmer US Dollar

• USD/CAD strengthens to around 1.3670 in Tuesday's early Asian session. 
• Trump has officially extended his tariff deadline to August 1. 
• A firmer US Dollar and lower Crude Oil prices act as a tailwind for the pair. 

The USD/CAD pair edges higher to near 1.3670 during the early  Asian session on Tuesday. The US Dollar (USD) strengthens against the Canadian Dollar (CAD) after US President Donald Trump announced new tariffs set to go into effect on August 1 for some trading partners. 

Bloomberg reported late Monday that Trump unveiled the first in a wave of promised letters threatening to impose higher tariff rates on key trading partners, including levies of 25% on goods from Japan and South Korea, and signed an executive order postponing the new duties until August 1. 

However, the Prime Minister's Office said on Monday that Canada was not targeted by the global tariffs and has committed to reaching a bilateral agreement with the United States by July 21. While not impacted by the global levies, Canada is nonetheless subject to fentanyl-related US duties. Canada is likewise affected by Trump's tariffs on steel, aluminum, and cars. This, in turn, could weigh on the Canadian Dollar in the near term and create a tailwind for the pair. 

Meanwhile, a decline in Crude Oil prices after the Organization of the Petroleum Exporting Countries and allies (OPEC+) agreed to a bigger-than-expected production increase in August might contribute to the commodity-linked Loonie's downside. It's worth noting that Canada is the largest oil exporter to the US, and lower crude oil prices tend to have a negative impact on the CAD value.  

Traders brace for the release of the FOMC Minutes on Wednesday, as it might offer insight into how Fed officials view the US economy. Any dovish remarks from the Fed policymakers might cap the upside for the USD against the Loonie.