The USD/CAD pair is trading around 1.4320 during Tuesday’s Asian session, recovering from the losses incurred in the previous session. The risk-sensitive pair has seen a rebound as traders adopt a cautious stance ahead of US President Donald Trump’s upcoming tariff announcement scheduled for April 2.
Despite the uncertainty surrounding the tariff plans, the Canadian Dollar (CAD) found some support as Trump hinted that “a lot” of countries could receive exemptions. While the specifics remain unclear, the possibility of a more measured, targeted approach to tariffs has eased concerns about potential disruptions to Canadian businesses.
Meanwhile, the US Dollar faced pressure due to growing fears of an economic slowdown, fueled by concerns over Trump’s trade policies. However, this downward pressure was mitigated by hawkish comments from Federal Reserve Chair Jerome Powell, who stated that “labor market conditions are solid, and inflation has moved closer to our 2% longer-run goal, though it remains somewhat elevated.”
On the economic data front, the S&P Global US Composite PMI rose to 53.5 in March, bouncing back from February’s 10-month low of 51.6. The March figure marked the strongest expansion since December 2024, largely driven by a sharp rebound in the services sector. The S&P Global US Services PMI surged to a three-month high of 54.3, exceeding market expectations, while the Manufacturing PMI fell to 49.8, below the anticipated 51.8, following February’s strong manufacturing growth.
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