Get the clarity you need to navigate shifting market conditions with confidence. The Market Services FX Spotlight delivers timely insights and analysis from RBC Investor Services’ FX Market Trading Desk, helping you understand the currency moves, central bank decisions and geopolitical shifts that matter most to your portfolio and your clients.
Headlines
- CUSMA negotiations collapsed on August 21, with both sides trading blame. As a result, 50% tariffs on auto parts, steel, trucks and cars will take effect January 1, 2027, and Canada announced retaliatory 50% tariffs on more than 700 US products effective September 8.
- Despite the escalating tariff rhetoric, USDCAD traded with minimal reaction, suggesting markets still viewed a resolution as eventually forthcoming.
- USD weakened through August as deteriorating US labour data—nonfarm payrolls declining against expectations for positive prints—and recalibrated Fed expectations triggered a sustained selloff.
- Canadian labour data impressed in stark contrast to the United States, with employment rising in July, unemployment falling to 6.4% and the participation rate climbing to 65.1%.
- US–Iran tensions oscillated throughout August, shifting from a potential breakthrough to Trump’s sanctions announcement, with China threatened with exclusion from the US dollar clearing system for purchasing Iranian oil.
CUSMA negotiations continued in August as Canadian and US trade ministers engaged in discussions surrounding a potential deal. Negotiations ultimately collapsed on August 21, with both sides trading blame. Despite this, USDCAD traded with minimal reaction, suggesting markets viewed a resolution as eventually forthcoming.
