USD/CAD consolidates above 1.3700 on cautious markets with tariff fears looming

•  The US Dollar consolidates within previous ranges, with downside attempts limited at 1.3700.
• The US Dollar Index is trading moderately lower amid declining US yields.
• Canada’s producer prices and the BoC Outlook Survey might provide further guidance to the CAD.

The US Dollar ticks up against the Canadian Dollar on Monday, with risk appetite subdued as Trump’s tariffs deadline approaches. In Canada, Producer and Import Price figures and the BoC Business Outlook Survey will guide the Loonie.

Price action remains contained within a narrow range, with downside attempts supported above 1.3700. However, bulls have failed to extend gains beyond 1.3720, which is well below last week’s high, currently at the 1.3780 area.

The US Dollar Index, which measures the value of the US Dollar against the world’s six most-traded currencies, has been moving moderately lower on Monday, weighed by retreating US Treasury yields and a moderate risk appetite at the European session opening, which, however, is vanishing as we head into the US session.

Canadian producer inflation and the BoC survey might guide the CAD today

The US calendar is void today, but investors will keep an eye on Trump. The US Commerce Secretary has shown optimism about the chances of cutting significant deals ahead of the August 1 deadline, but the US president keeps modifying tariffs randomly, which increases investors’ anxiety.

In Canada, later today, industrial product prices are expected to have increased 0.1% in June, following a 0.4% contraction in May. Prices for Raw materials, however, are expected to have declined for the fourth consecutive month, although at a slower pace, down 0.2% from the previous -0.4%.

Beyond that, the Bank of Canada will release its monthly Business Outlook Survey, which might give further guidance for the Canadian Dollar during the US trading session.