USD/CAD holds steady around 1.3700 as US-China trade talks take center stage

USD/CAD is trading around 1.3700 in a steady posture during the early Asian session on Tuesday. Easing tensions between the US and China are likely to provide some support to the US dollar. The US-China trade talks will continue into the second day and will be closely watched.

Trade talks between the world's two largest economies will continue into the second day, a US official said. The US expressed its willingness to lift restrictions on certain technology exports on the assurance that China will ease its rare earth export restrictions. Easing trade tensions are likely to boost the US dollar (USD) against the Canadian dollar (CAD) in the short term.

In addition, a stronger-than-expected US May jobs report provides a cautious basis for the Federal Reserve (Fed), which may also boost the US dollar. Federal Funds futures indicate that there is an increased probability that the Fed may keep its benchmark interest rate unchanged until the September monetary policy meeting.

On the other hand, rising crude oil prices are likely to support the commodity-linked Canadian dollar and pose resistance to the pair. It is worth noting that Canada is the largest oil exporter to the United States and higher crude oil prices tend to have a positive impact on the value of the Canadian dollar.