USD/CAD holds below 1.4450 on softer US Dollar, investors await US PMI release
USD/CAD softens to near 1.4440 in Monday’s early Asian session.
Canada's Q4 GDP grew by 2.6% on an annualized basis, stronger than expected.
Trump will set exact levels for Mexico, Canada tariffs coming Tuesday.
The USD/CAD pair weakens to around 1.4440 during the early Asian session on Monday. The stronger-than-expected Canadian economic growth and the recovery in crude oil prices support the Loonie. The US February ISM Manufacturing Purchasing Managers Index (PMI) will take center stage later on Monday.
Data released by Statistics Canada on Friday showed that Canada's Gross Domestic Product (GDP) in the fourth quarter (Q4) expanded by 2.6% on an annualized basis, beating the estimation of 1.9%. "The Canadian economy has certainly faced some headwinds but it exited 2024 in a stronger position than believed," said Adam Button, chief currency analyst at ForexLive.
Meanwhile, a rise in crude oil prices underpins the commodity-linked Canadian Dollar (CAD). It’s worth noting that Canada is the largest oil exporter to the United States (US), and higher crude oil prices tend to have a positive impact on the CAD value.
On the other hand, US President Donald Trump said on Thursday that he intended to move forward with threatened 25% tariffs on imports from Canada and Mexico, which are set to come into effect on Tuesday. Traders will closely monitor the developments surrounding further Trump’s tariff policies. Any signs of trade tensions could lift the Greenback against the CAD in the near term.
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