As it had been expected, the beginning of the New York trades was rather active. Canada's monetary authorities took into account macroeconomic reports and hiked the key interest rate by 25 basis points to 1.5%. The Bank of Canada's officials expect the stable inflation rate of 2.5% and the annual earnings growth of 2.3%. The GDP forecast was also quite positive. The market reacted to the upbeat rhetoric with a surge in purchases of the Canadian currency. The USD/CAD pair fell by 70 pips to 1.3070.
However, once the US protectionism issue was touched, the pair returned to earlier levels. Jitters still persist in the market on the back of the announcement that the United States intends to introduce additional tariffs on 200 billion dollars of the Chinese imports. Investors regard the greenback as one of the safest haven assets, so the US dollar is going to rise even despite the fact that the US is one of the main participants of this trade war. Expectations of strong inflation data from the United States would support the greenback today.