USD/CAD attracts some buyers to near 1.4445 in Tuesday’s Asian session, up 0.94% on the day.
Trump said he considered imposing 25% tariffs on Canada and Mexico in February.
Canada’s December CPI inflation will be the highlight later on Tuesday.
The USD/CAD pair jumps to around 1.4445 during the Asian trading hours on Tuesday. The Canadian Dollar (CAD) weakens on US President Donald Trump's remarks on tariffs on Canada. Later on Tuesday, the Canadian December Consumer Price Index (CPI) inflation data will be in the spotlight.
On Monday, Trump said that he was thinking of imposing 25% tariffs on imports from Canada and Mexico, as both countries were allowing many people to cross the border as well as fentanyl. Trump added that the action could come as soon as early February. “We’re thinking in terms of 25% (levies) on Mexico and Canada because they’re allowing cast number of people” over the border, Trump said.
Furthermore, the Bank of Canada’s (BoC) Business Outlook Survey suggested that overall economic sentiment in Canada remains subdued. Canadian firms see improved demand and sales in the coming year, fueled by rate cuts, but are concerned about the potential risks from promised US trade policies from Trump’s administration.
Investors will keep an eye on Canada’s December CPI inflation data, which is due later on Tuesday. The CPI is estimated to see an increase of 1.8% YoY in December versus 1.9% prior. If the report shows an unexpected upside in inflation, this could lift the Canadian Dollar and cap the upside for the pair.
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