EUR/CAD rallies above 1.4800 as US Trump threatens higher tariffs on Canada

EUR/CAD surges above 1.4800 as Trump warns of higher tariffs on Canada and Mexico.

Fears of higher tariffs on Canada has weakened the Loonie.

ECB officials shift focus to economic risks than taming price pressures.

The EUR/CAD pair soars to near 1.4830 in European trading hours on Tuesday. The cross strengthens as the Canadian Dollar (CAD) weakens after United States (US) President-elect Donald Trump threatens to raise import tariffs by 25% on Canada and Mexico.

Trump said in a post on Truth.social that China has poured illicit drugs into the US, mainly through Mexico. Trump added that he will impose an additional 10% on China, which will be over 60% that he mentioned in his election campaign.

The announcement of higher tariffs on Canada has weakened the CAD across the board. Canada is one of leading trading partner of the US and higher-level tariff on the nation will dampen its export sector.

Though investors have underpinned the Euro (EUR) against the Canadian Dollar, its performance against other major peers has remained weak as the Eurozone is also expected be the victim of higher tariffs by Trump. In the election campaign, Tump said that the bloc will pay to pay a price for not buying enough American goods.