empty
05.03.2025 01:30 PM
USD/CAD: The Pair Declines Amid the Implementation of Trump's New Tariffs

This image is no longer relevant

For the second consecutive day, USD/CAD continues its downward movement. The U.S. dollar remains under pressure due to growing concerns about an economic slowdown, fueled by the impact of new tariffs imposed by Donald Trump. On Tuesday, Trump's 25% tariffs on Canadian and Mexican goods officially took effect, along with an increase in tariffs on Chinese imports to 20%, adding further uncertainty to the market.

According to U.S. Commerce Secretary Howard Lutnick, in an interview with Fox News, Trump may reconsider his tariff policy within 48 hours of its implementation, which could provide some relief, provided that USMCA conditions are met. However, the New York Times reports that Trump has privately expressed his intention to keep the tariffs in place, creating additional risks for the market.

The U.S. Dollar Index, which measures the dollar's value against a basket of six major currencies, has been declining for the third consecutive day. Market sentiment continues to weigh on the greenback amid speculation that Trump may ease his stance on tariffs.

This image is no longer relevant

Key Economic Data to Watch Today

Investors should pay close attention to the ISM Services PMI and the ADP Employment Report, both scheduled for release during the North American trading session.

The Canadian dollar also faces downside risks, which limits further losses in USD/CAD. Expectations for additional rate cuts by the Bank of Canada (BoC) are increasing. According to Reuters, markets have already priced in an 80% probability of a rate cut by the BoC next week.

BMO Chief Economist Douglas Porter noted that the expected quarter-point rate reduction is likely to continue for the next four meetings until July, bringing the key rate down to 2.0%.

Market Outlook and Technical Factors

Additionally, as the Canadian dollar is closely tied to oil prices, the recent decline in crude oil also acts as a limiting factor for further USD/CAD downside movement.

From a technical perspective, despite the U.S. dollar's decline against the Canadian dollar, oscillators on the daily chart remain in positive territory, indicating that further downside pressure may be limited in the near term.

Irina Yanina,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/JPY. Analysis and Forecast

At the start of the week, following the release of a weaker Japanese PMI, the yen came under pressure. This, combined with news of narrower and less aggressive retaliatory tariffs

Irina Yanina 13:20 2025-03-24 UTC+2

XAU/USD. Analysis and Forecast

Today, gold prices remain low but are holding above the psychological level of $3000, which serves as an important support. News that emerged over the weekend indicates that U.S. President

Irina Yanina 10:25 2025-03-24 UTC+2

The Market Fell Into a Pit It Dug for Others

What drives the markets? Fear? Greed? At the moment, disappointment is far more significant. Investors are realizing that Donald Trump's tariff policy will not lead to anything good

Marek Petkovich 09:23 2025-03-24 UTC+2

Markets Are Tired of Falling. Investors Look for Growth Triggers (CFD contracts on #SPX and #NDX futures may rise on positive U.S. economic data)

Global financial markets continue to swing back and forth amid uncertainty over the actual impact on the economies of various countries targeted by Donald Trump's tariff hikes, which have prompted

Pati Gani 09:23 2025-03-24 UTC+2

EUR/USD Weekly Preview: PMI and IFO Indices, U.S. GDP, and Core PCE Index

The upcoming week's economic calendar is packed with important fundamental events. Macroeconomic reports will either help EUR/USD sellers consolidate within the 1.07 range or enable buyers to hold above

Irina Manzenko 06:52 2025-03-24 UTC+2

What to Pay Attention to on March 24? A Breakdown of Fundamental Events for Beginners

Eight macroeconomic events are scheduled for Monday. Preliminary March readings of business activity indices in the manufacturing and services sectors will be published in Germany, the Eurozone, the U.S

Paolo Greco 06:08 2025-03-24 UTC+2

USD/JPY. Analysis and Forecast

Today, following the release of data showing a February slowdown in the national Consumer Price Index (CPI), the Japanese yen continues to trade with a negative tone, creating uncertainty

Irina Yanina 11:07 2025-03-21 UTC+2

US stock market getting ready for zero hour

The Federal Reserve has done all it can to calm the markets, but in 2025, the spotlight has shifted away from the central bank. The S&P 500 has brushed

Marek Petkovich 09:20 2025-03-21 UTC+2

What to Pay Attention to on March 21? A Breakdown of Fundamental Events for Beginners

There are no scheduled macroeconomic events for Friday. The euro and the pound have finally declined against the U.S. dollar. The Federal Reserve has done its part to calm

Paolo Greco 06:06 2025-03-21 UTC+2

GBP/USD Pair Overview – March 21: The Bank of England Had No Impact on the Current Situation

The GBP/USD currency pair traded very calmly on Thursday, as on Wednesday evening. As the chart below clearly shows, volatility has recently dropped to noticeably low levels. What

Paolo Greco 04:16 2025-03-21 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.