USD/CAD drops below 1.2900 as Trumps exempts Canada from tariffs

• Canada excluded from US tariffs on steel and aluminum imports. 
• CAD rises after Trump’s announcement. 
• Key data ahead: US and Canadian jobs data on Friday. 

The loonie rose across the board after reports confirmed that Trump agreed to exempt Canada from the new tariffs. US President signed the order that imposes tariffs of 25% on imported steel and 10% on aluminum. The order goes into effect in 15 days. The decision from the Trump administration created fears about a global trade war. 

USD/CAD reached earlier today a daily high at 1.2955 on the back of a rebound of the US dollar. Rumors about Canada being excluded from tariffs pushed the pair to the downside. Recently dropped to 1.2886 and near the end of the day it was hovering slightly below 1.2900, around the same level it closed Wednesday ahead of a busy day. On Friday, the US and Canadian job reports will be released at 13:30 GMT. 

Levels to watch 

The pair has been capped by the 1.3000 region and making lower highs, a signal of some difficulties for the rally. The downwind remains limited above 1.2860. A consolidation below that level would signal more losses ahead. 

The negative tone is likely to intensify below 1.2860. Supports levels under that area are seen at 1.2840, 1.2805/10 (Mar 1 low) and 1.2775. On the upside, immediate resistance lies at 1.2920, followed by 1.2960; above the pair could rise to test again the key 1.3000 level.