The USD/CAD pair is showing upward movement, currently positioned around 1.3520 during the Asian session on Friday. Trump issued a warning of a 50% tariff on aircraft imports from Canada amid a dispute regarding jet certification. Market participants are closely monitoring the announcement of Trump’s selection for the Federal Reserve Chair this Friday morning. The USD/CAD pair shows signs of recovery, approaching 1.3520 during the Asian trading session on Friday. The US Dollar exhibits strength against the Canadian Dollar in anticipation of US President Donald Trump’s announcement regarding the Federal Reserve chair. The upcoming release of the US Producer Price Index report is scheduled for later on Friday.
On Thursday, Trump issued a warning regarding the potential implementation of a 50% tariff on all aircraft exported from Canada to the United States, alleging that Canada is unjustly hindering the certification process for Gulfstream business jets. Renewed trade tensions and uncertainty may exert pressure on the Loonie, potentially providing support for the pair in the short term. Trump indicated late Thursday that he will reveal his selection to succeed Jerome Powell as the chair of the Federal Reserve on Friday morning, according to reports. Former Fed Governor Kevin Warsh is gaining traction as the leading candidate after a reported meeting with Trump at the White House. Market participants will pay close attention to the unfolding events regarding possible effects on the autonomy of the Federal Reserve and the trajectory of interest rates.
The source indicated on Thursday that an agreement was reached between Trump and Senate Democrats, potentially preventing a government shutdown and allowing additional time for discussions regarding limitations on the administration’s immigration enforcement measures. Market concerns subsided following this headline, resulting in an appreciation of the Greenback relative to the CAD.
Nonetheless, the timeline for the House to process those funding bills following their passage in the Senate remains uncertain. The deadline for the shutdown is set for midnight on Friday. The recent recovery of the Greenback might be fleeting if market anxieties return, especially regarding the Fed’s autonomy and the potential for a US government shutdown, which could persistently impact the USD.