 Dollar advanced broadly after US President Donald Trump escalated trade war again with a fresh 35% tariff on Canadian imports. The announcement cited Canadian retaliation and the fentanyl crisis as justification, while threatening even steeper duties if Ottawa imposes further countermeasures. Trump’s sweeping tone extended beyond Canada. While 22 countries have received formal letters setting tariffs between 20% and 50%, Trump said countries not on that list could face “blanket” tariffs of 15% to 20%. Despite Dollar’s strength, FX traders showed limited urgency, with USD/CAD drifting higher but lacking strong follow-through. It’s Aussie that overtook the spot of top-performing currency of the week, hitting a nine-month high against the greenback. Aussie's rally reflects strong risk appetite as seen in record breaking stocks in the US and Europe. Expectations that Australia will fall on the lower end of Trump’s sweeping tariff measures are also lifting the Aussie. Additionally, RBA's cautiousness, which defied market expectations for a rate cut and opted for a hold this week, also provides some support. RBA is likely to resume rate reduction in August, after getting the quarterly CPI report due July 30. Yet, given the complexity for US tariffs to ripple through the global supply chains, RBA would tread cautious ahead, and only ease policy in a measured pace. | 
