Trump’s three-day pause on 50% tariffs against Canada and climbing crude prices lift the CAD, pressuring the USD/CAD pair.
The USD/CAD pair dropped 0.62% to 1.3810 on Wednesday after US President Donald Trump delayed 50% tariffs on Canadian goods for three days. The temporary reprieve followed talks with Canadian Prime Minister Mark Carney, easing trade tensions but leaving longer-term uncertainty unresolved.
Oil prices, a key driver for the commodity-linked CAD, climbed to a nearly three-week high amid supply concerns tied to US-Iran tensions in the Strait of Hormuz. The USD, meanwhile, remained weak after hitting a two-month low, as cooling inflation and slowing consumer spending reduced bets on immediate Fed tightening.
Investors now weigh whether rising energy costs could prompt the Fed to maintain a restrictive stance, despite softer economic data.