US dollar spikes against the Canadian dollar on Thursday

With the announcement of a tariff, we have just about wiped out the selloff after the more hawkish than expected Bank of Canada statement during the previous session. If we can break to a fresh, new high, the market should continue to go much higher, perhaps reaching towards 1.33 level, and then perhaps the 1.35 level after that. I think that pullbacks at this point will more than likely find buyers, especially if those tariffs get extended. John that, the Canadians could retaliate, but quite frankly they don’t have much to retaliate with. If the Canadians put a tariff on American goods, then the Americans could turn around and ignore Canadian oil. In other words, this could escalate rather quickly, it would not end up well for Canada.

It is because of this and known higher interest rates coming in the United States, that I think that the market will continue to go higher, I believe that the 1.2750 level underneath is support. If we break down below there, it could change some things but right now I believe that the market is still favoring the upside, and I believe that the US dollar will continue to strengthen over the summer. Quite frankly, as people get a bit afraid, it’s likely that the US dollar will continue to strengthen as people prefer larger and more stable economies.