Trump Raises Tariffs on Canada to 35%

U.S. President Donald Trump announced that the United States will impose a 35% tariff on Canadian imports starting August 1, a sharp increase from the existing 25% rate. In a letter shared via his social media platform, Trump warned Canadian Prime Minister Mark Carney that the rate could rise further if Canada retaliates. He also revealed plans to introduce blanket tariffs of 15% to 20% on most other U.S. trading partners. This move comes as a setback to Carney, who had been working toward finalising a new trade agreement with Washington.

In the same letter, Trump criticised Canada for its alleged role in the flow of fentanyl into the U.S., and for trade barriers that he claims harm American dairy farmers and other industries. He framed the U.S. trade deficit with Canada as a national security risk. Canadian officials refuted the fentanyl claims, stating that only a minimal amount originates from their country and that measures have been taken to secure the border. Carney’s office has yet to respond to Trump’s latest remarks, though the prime minister previously indicated that both leaders aimed to finalise a new economic and security pact within 30 days.

(USD/CAD Daily Chart, Source: Trading View)

From a technical analysis perspective, the USD/CAD currency pair has been in a bearish trend since February 2025, as evidenced by a series of lower highs and lower lows. Currently, it is retesting the swap zone between 1.3700 and 1.3730 and has shown signs of slight rejection, as indicated by the long upper wick at the time of writing. If the pair fails to close within or above this zone in the near term, it may suggest that bearish momentum remains intact, potentially pushing the pair lower toward the support zone of 1.3570 – 1.3600.

Gold Climbs Amid Tariff Hikes and Rate Cut Speculation

Gold prices climbed to around $3,335 per ounce on Friday during the Asian trading session, marking a third consecutive session of gains as investors sought perceived safe-haven assets amid rising global trade tensions. The rally followed U.S. President Donald Trump's announcement of a 35% tariff on Canadian imports starting August 1, along with plans for 15% to 20% blanket tariffs on most other trading partners.  

Adding to market volatility, Trump also called for a dramatic 300 basis point cut in the Fed funds rate, fueling speculation that a dovish Federal Reserve nominee may emerge next year. This stoked concerns over long-term inflation expectations. On the economic front, initial jobless claims fell for the fourth straight week, beating forecasts and reinforcing confidence in a strong labour market following last week’s robust non-farm payrolls data. Despite this resilience, markets continue to price in two rate cuts for the year, although futures suggest the Fed is likely to hold steady at the upcoming meeting.

(Gold Daily Price Chart, Source: Trading View)

From a technical analysis perspective, the gold price has been in a bearish trend since June 16, 2025, after being rejected from the key resistance zone of 3,325 – 3,445, as indicated by a series of lower highs and lower lows. Currently, the price is approaching the order block at 3,339 – 3,359. If it fails to close above this level, it indicates that bearish pressure remains intact, potentially driving the price lower and possibly leading to a retest of the support zone of 3,230 – 3,250. Conversely, if bullish momentum pushes the price above the order block, it could continue to surge higher and retest the resistance zone.

Oil Demand Outlook Weakens

OPEC has lowered its global oil demand forecast for 2026 – 2029, citing weaker consumption trends in China. The group now expects demand in 2026 to reach 106.3 million barrels per day, down from last year’s estimate of 108 million. Additionally, OPEC is reportedly considering pausing further production increases starting in October, a move seen by traders as a sign the market may struggle to absorb additional supply.

At the same time, markets are assessing the broader implications of President Trump’s announcement of a 35% tariff on Canadian imports beginning August 1, along with proposed blanket tariffs of 15 – 20% on other major trading partners. These protectionist measures are expected to weigh on global economic growth and, in turn, dampen oil demand.

(Crude Oil Futures Daily Chart, Source: Trading View)

From a technical analysis perspective, crude oil futures have rebounded from a previous daily bullish engulfing candlestick at the support zone around the 64.70 level, as well as from a strong order block between 64.00 and 64.70, both indicating that bullish momentum may be regaining control. This valid bullish movement, as shown by the formation of higher highs and higher lows, suggests that the price may potentially continue to rise and retest the resistance level at 72.25.