The U.S. dollar’s slide against the Canadian dollar is back in the political crosshairs after Donald Trump said the USD-to-CAD exchange rate is “unacceptable,” putting fresh scrutiny on a currency pair already trading near the upper end of its recent range and reminding investors how quickly exchange rates can become a trade issue.
USD/CAD Near 1.38 After Trump FX Comments
The comments matter because a weaker Canadian dollar makes U.S. imports from Canada more expensive and can feed into price pressures on both sides of the border, while also affecting earnings for exporters, automakers, resource companies and anyone with cross-border revenue exposure. For investors, the bigger issue is whether Washington is preparing to lean harder on currency-sensitive trade policy just as markets are already parsing the outlook for the Federal Reserve and the dollar.
USD/CAD was last at 1.38, after spending the prior week between 1.38 and 1.39, with the pair still above its 200-day moving average of 1.38 and just below the 50-day average of 1.40. The reading signals a Canadian dollar that has recovered from earlier weakness but remains vulnerable if rhetoric escalates into policy action or tariff threats.
The broader dollar backdrop is mixed. The U.S. Dollar Index ETF, UUP, closed at 28.08 on Sept. 4, holding above its 200-day moving average of 27.62 even after a modest pullback from late-summer highs. Adalytica’s US dollar trade signal snapshot shows sentiment at 84, or “Greed,” suggesting crowded positioning can amplify moves if the market starts to price in a more aggressive U.S. stance on trade and currency.
For Canada, the risk is that renewed pressure from Washington lands just as growth-sensitive sectors are already watching the exchange rate closely. For U.S. investors, a firmer Canadian dollar would aid domestic companies with Canadian revenue, but could squeeze importers and retailers with exposure to cross-border sourcing.
The next catalysts are U.S. economic data and any follow-up from the White House or Treasury, which could determine whether Trump’s comments stay political or become a market-moving currency signal.
| Entity | Gains | Losses |
|---|---|---|
| U.S. exporters | ▲More competitive pricing | ▼Stronger dollar pressure |
| Canadian exporters | ▲Weaker CAD boosts revenue | ▼Policy and FX volatility |
| U.S. importers | ▲Lower input costs if CAD firms | ▼Higher costs if Canada retaliates |
| FX bulls | ▲Momentum if rhetoric fuels flows | ▼Risk of intervention headlines |
