The US Dollar (USD) extended its losing streak against the Canadian Dollar (CAD) for the third consecutive session on Tuesday, with USD/CAD falling toward 1.3670, its lowest level in 10 days. This continued pullback comes amid broad-based weakness in the Greenback, driven by growing investor anxiety over the economic fallout from US tariffs.

As the 1 August tariff deadline approaches, markets are becoming increasingly unsettled by the lack of meaningful progress in trade negotiations between the US and its major partners, including the European Union and Japan. The prolonged uncertainty has sparked concerns about global trade disruptions, denting sentiment toward the USD and putting pressure on the currency across the board.

While Tuesday’s economic calendar is relatively quiet, Fed Chair Jerome Powell is set to speak later at an event in Washington. Powell is unlikely to address monetary policy directly, as the Federal Reserve is currently in its blackout period ahead of its next interest rate decision. However, his speech could still move markets if he chooses to defend the central bank’s independence, particularly in light of recent political tensions.

Earlier speculation that President Donald Trump might attempt to fire Powell has cooled for now, though the President continues to criticize the Fed and call for Powell’s resignation. Some lawmakers have gone so far as to accuse Powell of fraud due to cost overruns tied to Fed building renovations, adding a layer of political drama to already fragile market sentiment.

Despite the USD’s weakness, the Canadian Dollar faces its headwinds. Crude oil prices—Canada’s key export—remain under pressure, hovering near 1.5-month lows amid a deteriorating global demand outlook and reduced trade flows. This limits the upside potential for the CAD and could temper further USD/CAD losses in the near term.

Trade Idea:
Sell USD/CAD on rallies toward 1.3720, targeting 1.3620, with a stop-loss at 1.3755, as tariff tensions weigh on the USD but weak oil caps CAD gains.