• USD/CAD increases to about 1.4500 in Thursday’s behind schedule American session.
• Trump repeats the threat of applying tariffs to Canada and Mexico on Saturday.
• Fed left rates have not changed and is not in a hurry to cut again.

The USD/CAD pair is gaining pace to about 1.4500 during the behind schedule American session on Thursday. The Canadian dollar (CAD) remains under sales pressure when US President Donald Trump repeated the threat of tariffs for goods from Canada and Mexico. Later on Friday, American expenses for personal consumption (PCE), personal income/expenses and an index of Chicago purchasing managers (PMI).

Trump said at the end of Thursday that the US is planning to impose a flat 25% of import tax “because of fentanyl” to all goods crossing the border to the USA from Canada or Mexico. The announcement of the first tariff policy in Canada and Mexico will appear on Saturday.

The potential of trade conflict caused by fresh American tariffs for Canadian export can consider Loon and act as a wind in USD/CAD. According to governmental data, USA are the main trade partners, exchange of $ 2.7 billion at their common border in 2023.

In addition, the US Federal Reserve (FED) left the loan rate from day to day unchanged from 4.25% -4.50% at the January meeting on Wednesday. Fed Chairman Jerome Powell noticed that officials are not in a hurry to lower interest rates, adding that the central bank stops to see further progress in the field of inflation after a series of rate reductions in 2024.

Wednesday Hawkish Hold by Fed can basically form the basis of the American dollar (USD) in the near future. According to the CME group data on the market, the funds rate is about 3.9%, which means a 61% chance of reducing percentage points by two quarters of percentage this year.