USD/CAD extends its upside near 1.4440 in Thursday’s early Asian session.
Canadian Dollar hits three-week low as tariff reprieve hopes fade
US GDP expanded by 2.3% in Q4 as initially estimate.
The USD/CAD pair extends the rally to around 1.4440 on a stronger US Dollar (USD) during the late American session on Thursday. The Canadian Dollar (CAD) weakens to a three-week low as US President Donald Trump said that tariffs on Canadian goods will go into effect on March 4, clearing up some confusion on the timing and dashing hopes of a reprieve.
Trump said that his proposed 25% tariffs on Mexican and Canadian goods will go into effect next week as scheduled because drugs are still pouring into the US from those countries. On Wednesday, Trump's comments on the matter seemed to suggest that he may push the deadline back for about one month until April 2.
Meanwhile, Crude oil prices fall to a two-month low, raising supply concerns as prospects for a peace deal between Russia and Ukraine are improving. This, in turn, undermines the commodity-linked Loonie as Canada is the largest oil exporter to the United States (US), and lower crude oil prices tend to have a negative impact on the CAD value.
Data released by the US Bureau of Economic Analysis (BEA) on Thursday revealed that the US Gross Domestic Product (GDP) expanded at an annual rate of 2.3% in the fourth quarter (Q4). This figure came in line with market expectations.
The release of PCE data will take center stage along with Personal Income/Spending and the Chicago PMI. In case of weaker-than-expected, this could boost the Greenback against the Loonie.
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