The Canadian dollar fell against most major currencies on Friday following decisions that signaled an escalation in the trade war between the United States and Canada.

U.S. President Donald Trump announced today the imposition of a 35% tariff on Canadian imports and threatened to raise tariffs on other countries as well.

In a post on Truth Social yesterday, Trump said the tariffs on Canada were a response to its failure to cooperate in stopping the flow of fentanyl into the United States, warning that he would raise them further if Canada retaliated.

Government data released today showed that the Canadian economy added 83.1 thousand jobs in June, far exceeding analysts expectations of only 0.9 thousand. The unemployment rate fell to 6.9% last month from 7.0% in May, while analysts had expected it to rise to 7.1%.

In trading, the Canadian dollar declined against its U.S. counterpart by 0.2% to 0.7308 at 20:53 GMT.

Australian Dollar

The Australian dollar also dropped against the U.S. dollar by 0.2% to 0.6577 at 20:53 GMT.

U.S. Dollar

The U.S. dollar index rose by 0.2% to 97.8 points at 20:29 GMT, after hitting a high of 97.9 and a low of 97.5.

In an interview with NBC, Trump said he intends to impose broad-based tariffs ranging between 15% and 20% on other countries a rate higher than the current 10% level investors have become accustomed to in recent months.

Brazilian President Luiz Incio Lula da Silva said he is seeking a diplomatic resolution to the tariff dispute with the United States but pledged to respond in kind if the tariffs are enacted on August 1.