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Trump claims that a striking agreement between the US and Canada has temporarily halted tariffs.

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US President Donald Trump announced late on Tuesday night that he was putting a three-day pause on new 50% tariffs set to go into effect on Canadian goods on Wednesday, saying the two countries had reached an agreement.

The pause was “based on the fact that Canada and the USA, subject to the finalisation of documents, have a DEAL,” Trump said in a post on Truth Social.

An hour later, Canadian Prime Minister Mark Carney said in a statement that “substantial progress has been made, although there is important work still to be done.”

Trump added in his social media post that the Keystone XL Pipeline – a project cancelled by former President Joe Biden in 2021 after years of indigenous and environmental opposition – “may be awoken from the grave,” but did not provide details.

Trump’s post came after he spoke with Canadian Prime Minister Mark Carney on Tuesday afternoon, their second conversation this week, and after weeks of intense, opaque negotiations.

Existing US auto tariffs had been a sticking point, two industry sources familiar with the talks said earlier.

The new US tariffs would have covered about $20 billion worth of imports and applied regardless of whether Canadian goods qualify for preferential treatment under the US-Mexico-Canada trade agreement, which has shielded much of Canadian industry from earlier US tariffs.

‘Billions of dollars at stake’

Trade experts and industry officials say new tariffs could lead to job losses and business closures in vulnerable sectors, including lumber, wine and dairy. They also warn the dispute could complicate broader USMCA negotiations.

“There are billions in goods per year that were not impacted before, but now are at risk of being impacted significantly,” said Candace Laing, CEO of the Canadian Chamber of Commerce.

“Businesses have been doing a high-wire act for well over a year, holding off on hiring, investment and growing in Canada,” she said.

Canada’s minister responsible for US trade, Dominic LeBlanc, and chief trade negotiator Janice Charette have been in Washington since last week for talks.

On Monday, the Canadian officials met for nearly two hours with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick.

Greer has repeatedly cited Canada’s tariffs that followed initial US tariffs, some provinces’ refusal to stock US liquor and Canada’s dairy supply management system among US grievances.

Two sources said one of the main sticking points was US tariffs on Canadian vehicles.

The sides have discussed cutting US Section 232 tariffs on Canadian vehicles to 15% from 25%, with further reductions based on the amount of US content in each vehicle, the sources said.

The details of the deal touted by Trump remained unclear.

Counting tariff deductions

A major point of contention was how tariff deductions based on content should be calculated, with Washington demanding that only US-produced content be counted. Canada pushed for all North American content, including Canadian and Mexican parts, to be counted, the sources said.

Earlier on Tuesday, the US Commerce Department released new rules for automakers exporting from Canada and Mexico to certify their current levels of US content for tariff deductions, reducing the complicated exercise to once per year from twice.

But the Federal Register notice said automakers must re-certify vehicles’ American content by September 30 for them to claim deductions in the new annual cycle starting December 1.

A Canadian government source said last week that all options remained on the table if the new tariffs take effect, including government support for affected domestic industries and a possible suspension of bilateral trade talks, but the source expressed hope that the US was keen to reach a deal.

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Petrol price cut by Rs1.49, diesel drops Rs2.73 per litre

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The recent revision in fuel-price has again lowered petrol and diesel costs.

Petrol has been cheaper by Rs1.49 per liter and diesel by a higher Rs2.73.

The new rates will come into effect from 30 September 2026.

Under the latest revision, the price of petrol will be Rs387.54 per liter and diesel would be Rs402.24 per liter for motorists starting September 30.

The latest change is another straight fall in the price of petrol.

Petrol has come down by Rs3.76 per liter and diesel by Rs6.29 per liter in the last two revisions.

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Dollar eyes big September jump, largely at euro’s expense

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The dollar was near this year’s high against the euro and heading for its biggest monthly gain against it in 14 months on Wednesday, thanks to US growth and rising US interest rates relative to oil and debt worries swirling in Europe.

The euro dropped to an 11-month low of $1.1312 on Tuesday and was last quoted at $1.1339 in Asia on Wednesday. The euro is also challenging support at about 178 yen.
The dollar is up almost 2.5% against the euro in September and is on track for a third consecutive quarterly gain.

The Aussie dollar fell below 70 cents for the first time since early August as the stronger greenback dragged it down to a nine-week low of $0.6959 after inflation data came in a tad below predictions.”The US economy is running hot, Europe is losing the global ​AI race and energy supplies and French politics remain big concerns for the euro,” said Brent Donnelly, president of foreign exchange trading ​at analytics firm Spectra Markets.

European benchmark gas prices jumped earlier this month to their highest since 2022.

French markets are being squeezed by debt and political paralysis ahead of next year’s presidential election with the margin with German rates blowing out above 115 basis points to its largest since 2012.

Options prices have just shifted dramatically to suggest investors prefer buying protection from potential euro declines – though Donnelly argues the dollar probably needs strong US data to make advances from here.

The dollar also struck a 16-1/2-month high against the Swiss franc of 0.8358 francs on Tuesday. The franc has been hit in part because investors have been searching for low-yielding alternatives to yen to sell so they can get carry elsewhere.

The yen has fallen out of favor as a short against the dollar, with US-Japan currency buying in July and August, then warnings not to test their resolve and a rise in the pace of Japanese rate ​hikes.

The dollar has lost 2% against the ​yen so far this month and ⁠almost 3.8% for the quarter to date, hitting a nearly two-week low of 156.38 in Asia trade.

The Fed’s favored inflation gage, US core PCE, is coming later on Wednesday but the market is looking forward Friday’s US jobs data which if strong might bolster predictions that US interest rates are headed higher.

Some of those hopes got knocked overnight when prominent New York Fed President John Williams indicated there is “no need for urgency” in raising rates. The yield on the two-year Treasury declined by 3.5 basis points and the odds in Fed funds futures of a rate hike next month fell to 50% from 71%.

The New Zealand dollar on Tuesday hit its lowest since last November and was last at $0.5645.

Sterling dropped to a three-month low on Tuesday and last traded near that level at $1.3230. The yuan was headed for a seventh quarterly increase in a row against the dollar in its last session before China’s Oct. 1-7 holidays.

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Oil prices rise for second session on continued Middle East supply concern

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Oil prices increased for a second straight session on Tuesday as ongoing fears of Middle East supply ​disruption due to US-Iran tensions overshadowed signals of recovering crude supplies ‌from the region.

Brent crude futures were up $1.49, or 1.4%, at $106.77 a barrel by 0326 GMT while US West Texas Intermediate crude was at $93.94, up $1.34, or 1.5%. Both benchmarks finished the last session with gains of around $1 a barrel.Higher volumes of oil exports are increasingly visible exiting the Gulf, but much of the growth still depends on workarounds such as ship-to-ship transfers. “The methods are less efficient, more costly than normal operations, which is why crude prices remain elevated,” KCM Trade chief analyst Tim Waterer said.

Crude exports from major Middle Eastern producers jumped to 12.8 million barrels a day in September, the highest since February, aided by higher shipments from Saudi Arabia and the United Arab Emirates, preliminary statistics from data source Kpler showed on Monday.

U.S. and Iranian officials separately spoke to mediators in a renewed effort to end seven months of hostilities, officials from both nations said. Further talks are widely expected to focus on a revised version of a seven-day proposal Iran submitted last week on the margins of the United Nations General Assembly.“The dominant risk remains the US-Iran standoff and its implications for energy prices and inflation expectations,” UOB analysts said in a client note.Iranian officials have allegedly been pessimistic about striking ​a compromise before the ⁠Strait of Hormuz crisis worsens further, keeping oil supply uncertainties elevated.”

The conflict that started in late February with US and Israeli strikes on Iran has turned the spotlight onto the Strait of Hormuz, a vital shipping path for oil and gas supplies that has been thrown into chaos and shaken up energy markets.

Meanwhile, the US is weighing regulatory relief to enable wider sales of red-dyed diesel to help decrease prices, a move ​that might ​allow some consumers to escape federal fuel tax, people ​familiar with discussions told Reuters. The proposal came after days of negotiations as a key alternative to a ban on fuel exports.

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