USD/CAD falls to near 1.3650 due to renewed tariff threats from Trump

• USD/CAD depreciates as US Dollar declines following updated Trump's tariff rates.
• President Trump announced new tariffs of up to 40% on 14 countries.
• The Canadian Dollar remains stable as the Prime Minister Office said that Canada was not targeted by the US tariffs.

USD/CAD depreciates after registering over 0.50% gains in the previous session, trading around 1.3650 during the Asian hours on Tuesday. The pair faces challenges as the US Dollar (USD) struggles, driven by market caution. This follows US President Donald Trump's announcement of updated tariff rates on 14 countries that have yet to secure trade deals with Washington.

US President Donald Trump renewed his threat of a 25% tax on imports from Japan and South Korea and shared a batch of other letters to world leaders warning of levies from 1 August. Trump also imposed 25% rates on Malaysia, Kazakhstan and Tunisia, while South Africa would see a 30% tariff and Laos and Myanmar would face a 40% levy. Other nations hit with levies included Indonesia with a 32% rate, Bangladesh with 35%, and Thailand and Cambodia with duties of 36%.

President Trump has delayed the implementation of new tariffs from July to August 1, giving negotiators more time to reach agreements. He added, "I would say firm, but not 100% firm. If they call up and they say we'd like to do something a different way, we're going to be open to that."

The downside of the USD/CAD pair could be attributed to the stable Canadian Dollar (CAD), supported by the recent comments from the Prime Minister Office on Monday. The office said that Canada was not targeted by the global tariffs and has committed to reaching a bilateral agreement with the United States by July 21. However, the CAD may face challenges as Canada is subject to fentanyl-related US duties. Canada is likewise affected by Trump's tariffs on steel, aluminum, and cars.