USD/CAD rises to near 1.3750 ahead of BoC Business Outlook Survey

• USD/CAD appreciates amid market caution, driven by the prevailing US-Canada trade tensions.
• Traders await further development on US-Canada tariff tensions after Mark Carney dispatched a trade envoy to Washington.
• The commodity-linked Canadian Dollar could find support from stable crude Oil prices.

USD/CAD attempts to retrace its recent losses from the previous session, trading around 1.3730 during the early European hours on Monday. The pair appreciates as the Canadian Dollar (CAD) struggles amid ongoing trade tensions. Traders are likely observing the release of the Bank of Canada (BoC) Business Outlook Survey, set to be published later in the North American session, for fresh directional cues.

US President Donald Trump threatened a 35% tariff on goods imported from Canada. However, Canadian Prime Minister Mark Carney has sent a trade envoy to Washington for last-ditch talks with President Trump ahead of the August 1 deadline for 35% steel and aluminum tariffs. The move offers markets some hope that key industrial inputs for Canada may remain tariff-free.

Moreover, US Commerce Secretary Howard Lutnick called the notion of US free trade with Canada is dead "silly" and mentioned that a substantial amount of Canadian goods enter the US tariff-free under the current North American free trade deal.

The upside of the USD/CAD pair could be restrained as the commodity-linked Canadian Dollar (CAD) could receive support from the stable crude Oil prices. West Texas Intermediate (WTI) Oil price is trading around $66.00 per barrel at the time of writing.

Crude Oil prices receive support from ongoing supply concerns following the European Union's (EU) last week's fresh sanctions on Russian Oil. The EU has approved its 18th round of sanctions against Moscow in response to the ongoing war in Ukraine. The latest measures include a reduced price cap on Russian Oil, tighter banking restrictions, and a ban targeting a major Indian Oil refinery.