The Canadian dollar had a rough session yesterday as the tariff deadline approached with no breakthrough in US-Canada negotiations, leaving markets increasingly concerned that the threatened 50% tariffs would go ahead.The picture changed completely after President Trump delivered another classic TACO moment by pausing the tariffs for three days. Trump added that the US and Canada have a deal, subject to the finalisation of the relevant documents. The news provided significant relief for the Canadian dollar, which erased all of its losses heading into the tariff deadline.Today, the loonie extended the gains versus the greenback today after the US Treasury announced that it would increase the size of its liquidity-support buyback operations for longer-dated securities.Chart: USD/CAD daily timeframeUSD/CAD recently broke through a major support zone around the 1.3920 level, which opened the door for a move into the next support around the 1.3750 level (all else being equal). The US-Iran war remains the main risk ahead. A prolonged stalemate with passive easing in financial conditions should be negative for the US dollar and continue to support the CAD into new highs. A major escalation, on the other hand, could give the greenback a boost on risk-off flows and renewed inflation/Fed rate hikes concerns. This article was written by Giuseppe Dellamotta at investinglive.com.