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

What to Pay Attention to on June 10? A Breakdown of Fundamental Events for Beginners

There are a few macroeconomic reports scheduled for Tuesday. The economic event calendars for both the Eurozone and the United States are empty, while the UK will release reports that

Paolo Greco 06:40 2025-06-10 UTC+2

GBP/USD Overview – June 10: A New Trial for Trump

The GBP/USD currency pair showed no interesting movements on Monday. However, given the current situation in the U.S., it's hard to envision any growth for the dollar. It turns

Paolo Greco 04:11 2025-06-10 UTC+2

EUR/USD Overview – June 10: Riots, Protests, Unrest

The EUR/USD currency pair traded very sluggishly on Monday. That's unfortunate because the news background becomes more interesting each day. This time, the news was not about trade tariffs

Paolo Greco 04:11 2025-06-10 UTC+2

EUR/USD: Calm Before the Storm? The Market Awaits News from London

The EUR/USD pair continues to trade within a 100-pip price range of 1.1350–1.1450, bouncing between its boundaries. Buyers are trying to hold within the 1.14 area, while sellers

Irina Manzenko 00:38 2025-06-10 UTC+2

The Dollar Feels Its Strength

A strong economy means a strong currency. In early June, the U.S. economy began to look strong again. EUR/USD bears anticipate a correction in the current upward trend, prompted

Marek Petkovich 00:38 2025-06-10 UTC+2

Strong Employment Report Supports the Canadian Dollar

Net employment change in May amounted to +8.8 thousand jobs, exceeding April's growth and presenting very strong data, especially against expectations — a loss of about 15 thousand jobs

Kuvat Raharjo 15:05 2025-06-09 UTC+2

AUD/USD. Analysis and Forecast

At the beginning of the new trading week, the AUD/USD pair is showing steady upward momentum, recovering from a slight pullback and once again approaching the highs seen in November

Irina Yanina 14:51 2025-06-09 UTC+2

USD/JPY. Analysis and Forecast

The USD/JPY pair is showing moderate weakness on Monday, dropping toward the psychological level of 144.00. The decline is driven by a combination of factors, including the strengthening

Irina Yanina 14:05 2025-06-09 UTC+2

WTI - West Texas Intermediate. Analysis and Forecast

At the start of the new week, prices for West Texas Intermediate (WTI) crude oil are attempting to stay near Friday's highs. Senior U.S. officials, including Treasury Secretary Scott Bessent

Irina Yanina 14:02 2025-06-09 UTC+2

Old Donald the Fighter Seems to Have Broken Down (there is a likelihood of continued growth in CFD contracts #NDX and #SPX)

Despite all the hardships, uncertainty, and overall market tension, stock indices persistently climb higher. Investors believe that Donald Trump will have to back down and retreat in his confrontation with

Pati Gani 10:06 2025-06-09 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.