USD/CAD remains under pressure as the US Dollar weakens amid growth concerns over the US economy.
President Donald Trump referred to the economy as being in a "transition period," hinting at a potential slowdown.
The Bank of Canada is widely expected to cut rates by 25 basis points at its March meeting on Wednesday.
USD/CAD holds losses after two days of gains, trading around 1.4440 during the Asian hours on Tuesday. The pair loses ground as the US Dollar (USD) struggles amid concerns that tariff policy uncertainty could push the US economy into recession. Investors are now looking ahead to February’s Consumer Price Index (CPI) release on Wednesday for further insights into inflation trends.
US President Donald Trump characterized the economy as being in a "transition period," hinting at a potential slowdown. Investors took his remarks as an early signal of possible economic turbulence in the near future.
Fed Chair Jerome Powell reassured markets that the central bank sees no immediate need to adjust monetary policy despite rising uncertainties. San Francisco Fed President Mary Daly echoed this sentiment, noting that increasing business uncertainty could dampen demand but does not justify an interest rate change.
US Commerce Secretary Howard Lutnick stated on Sunday that the 25% tariffs, imposed by President Donald Trump in February, on imports from top foreign suppliers like Canada and Mexico, set to take effect on Wednesday, are unlikely to be postponed, according to Bloomberg. While US steelmakers have urged Trump to maintain the tariffs, businesses reliant on these materials may face increased costs.
The Bank of Canada (BoC) is expected to cut rates by 25 basis points at its March meeting on Wednesday. CIBC analysts predict the central bank will lower its benchmark rate to 2.75%, with further cuts likely if trade uncertainty continues
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