USD/CAD extends the decline below 1.4300 ahead of Trump’s tariff announcement
USD/CAD edges lower to near 1.4295 in Tuesday’s late American session.
The US ISM Manufacturing PMI declined into contraction territory below 50 in March.
Trump is set to implement tariffs on US trading partners on Wednesday.
The USD/CAD pair extends the decline to around 1.4295 during the late American session on Tuesday. The US Dollar (USD) weakens against the Canadian Dollar (CAD) after US economic data showed softness in the manufacturing sector ahead of tariff announcements from the Trump administration due Wednesday.
US manufacturing contracted in March, with the ISM Manufacturing Purchasing Managers Index (PMI) dropping to 49.0 from 50.3 in February. This figure came in below the market expectation of 49.5. This comes as concerns mount about how much tariffs will raise prices for consumers and businesses.
Trump said that he will impose “reciprocal tariffs” on Wednesday, suggesting that many countries with their own duties on US goods could suddenly face new trade barriers. The White House stated that Trump’s forthcoming tariffs will take effect right after they are unveiled on Wednesday. However, the lack of clarity on trade policies, including the scope and severity of the tariffs and how they will be calculated, could undermine the Greenback in the near term.
Meanwhile, a rise in Crude Oil prices might underpin the commodity-linked Loonie in the near term and create a headwind for USD/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.
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