The US dollar is broadly stronger today on better economic data and that's leading to some breakouts. The Canadian dollar is hanging with the USD better than most currencies (it's the 2nd strongest major today) but it's still taking on water. USD/CAD rose to the highest since May with a 46 pip rise to 1.3941.
The climb effectively undoes the summer swoon in USD/CAD and is a strong rejection of support at 1.3500.
The good news for the Canadian dollar is that the stronger growth outlook from the US should spill across the border, particularly with the vast majority of Canada-US trading still taking place at 0% tariffs.
The bad news is that if Trump can maintain low inflation and good growth with the tariffs so far, he will be emboldened to do more. The USMCA agreement is due for renegotiation starting next summer and a strong economy will put him on a better footing to insist on a 15% tariff on Canadian exports.
