USD/CAD experiences a downward movement, approaching 1.3670 during the early European session on Thursday. The US Trade Representative indicated that tariffs may increase to 15% or more for certain nations. Market participants are poised for the forthcoming Canadian GDP and US PPI reports scheduled for release on Friday, seeking new momentum. The Canadian Dollar maintains its strength above 1.3650 amid ongoing uncertainty regarding US tariffs. The USD/CAD pair is experiencing a weaker performance, trading near 1.3670 in the early European session on Thursday. The US Dollar softens against the Canadian Dollar amid lingering uncertainty over US economic policies and fresh concerns regarding potential tariff increases.
Later on Friday, the Canadian Gross Domestic Product and US Producer Price Index reports will serve as key focal points. US Trade Representative Jamieson Greer on Wednesday indicated that US President Donald Trump intends to increase this rate to 15% or higher for numerous countries in the near future. This authority is confined to a period of 150 days, unless Congress opts to extend it. Greer’s remarks concerning possible tariff increases have undermined confidence in the Greenback. Ongoing geopolitical risks may elevate crude oil prices, thereby offering a degree of support to the commodity-linked Canadian dollar.
Canada stands out as a significant player in the oil export market, with elevated crude oil prices typically exerting a favorable influence on the CAD. Market participants will pay careful attention to the unfolding dynamics of the US-Iran nuclear negotiations. Officials from the United States and Iran are scheduled to convene in Geneva on Thursday for a third round of indirect negotiations. The upcoming release of the US January PPI data on Friday is anticipated with great interest.
Analysts anticipate that the Producer Price Index will reflect a modest rise of 0.3% month-over-month in January, in contrast to the 0.5% observed in December. The annual PPI is projected to increase by 2.6% in January, compared to a previous figure of 3.0%. A reading that exceeds expectations may further diminish hopes for interest rate reductions and support the USD relative to the CAD in the short term.