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

XAU/USD. Analysis and Forecast

Gold is experiencing a slight decline after reaching a new all-time high, remaining in a defensive stance. Currently, bullish traders are exercising caution, as indicated by overbought conditions

Irina Yanina 10:29 2025-03-20 UTC+2

Fed's message music to bulls' ears

The Fed is not throwing a lifeline to the S&P 500, but does it need one? Lifelines are for those drowning, while the market is merely spooked by a fleeting

Marek Petkovich 09:05 2025-03-20 UTC+2

Markets Are Stuck in a Vicious Circle with No Exit in Sight (Potential Decline for Bitcoin and Gold Prices)

The markets are currently experiencing significant shock due to a prevailing negative sentiment that looms over them like a heavy burden, with no resolution in sight. Given this situation

Pati Gani 08:23 2025-03-20 UTC+2

What to Pay Attention to on March 20? A Breakdown of Fundamental Events for Beginners

There are several macroeconomic events scheduled for Thursday, primarily in the UK. Key reports will include the unemployment rate, changes in the number of unemployed individuals, and average wages

Paolo Greco 07:15 2025-03-20 UTC+2

GBP/USD Pair Overview – March 20: Bank of England Vote May Cool Bullish Sentiment

The GBP/USD currency pair traded very calmly on Wednesday, considering the evening movements. As a reminder, we are not analyzing the results of the Federal Reserve meeting

Paolo Greco 02:18 2025-03-20 UTC+2

EUR/USD Pair Overview – March 20: The Euro Holds a Strong Leadership Position

On Wednesday, the EUR/USD currency pair experienced a slight pullback but failed to consolidate below the moving average line. As per tradition, we will not analyze the outcome

Paolo Greco 02:18 2025-03-20 UTC+2

EUR/JPY: Mixed Outcomes of the Bank of Japan's March Meeting and Germany's "Debt Brake" Reform

The Bank of Japan has concluded its March policy meeting, delivering the most anticipated baseline scenario—keeping all monetary policy parameters unchanged. Market participants closely followed the statements of BOJ Governor

Irina Manzenko 23:43 2025-03-19 UTC+2

Euro Hits the Ceiling

Bets are now closed, ladies and gentlemen! Many have already played out. The EUR/USD's hesitation to rise following the Bundestag's approval of Friedrich Merz's fiscal stimulus package indicates that this

Marek Petkovich 23:43 2025-03-19 UTC+2

USD/CAD. Analysis and Forecast

The USD/CAD pair is showing signs of recovery for the second consecutive day after a recent decline, rebounding from a two-week low around 1.4260. Spot prices have climbed above

Irina Yanina 10:16 2025-03-19 UTC+2

Stock market pays dear cost for Washington's rhetoric

The boomerang effect: what goes around, comes around The US is retreating from globalization, and it is only a matter of time before it faces the consequences. According

Marek Petkovich 09:51 2025-03-19 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.