- USD/CAD bounces to the area of 1.4345 during Tuesday’s early Asian session.
- Trump said the Washington Post’s reporting that he would tighten his tariff policy was wrong.
- Trudeau is expected to announce his resignation as party leader before Wednesday’s national caucus meeting.
The USD/CAD pair is paring some losses to around 1.4345 during Tuesday’s Asian session. The US Dollar (USD) fell after President-elect Donald Trump announced that his tariff policy would not be eased. Investors will be closely watching developments related to political uncertainty in Canada. The US ISM Purchasing Managers’ Index (PMI) for December will also be in focus on Tuesday.
Trump has denied reports that he is considering a tariff plan that would narrow focus to a select set of goods and services. But the risks associated with his tariff plans could create instability in financial markets until Trump’s inauguration. Investors will be monitoring how aggressive Trump’s tariff policies could be once he takes office.
Meanwhile, hawkish comments from US Federal Reserve (Fed) officials may provide some support for the dollar. Fed Governor Lisa Cook noted on Monday that the U.S. central bank can afford to be cautious about further interest rate cuts given a mighty economy and more stable-than-expected inflation.
On the Loonie front, it is more likely that Canadian Prime Minister Justin Trudeau will announce his resignation, but he has not made a final decision yet. A source told Reuters and The Globe and Mail it was unclear exactly when Trudeau would announce his plans to step down, but expected it would be before an emergency meeting of Liberal lawmakers on Wednesday.
