Canadian Dollar holds gains above 1.3650 on lingering US tariff uncertainty
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The USD/CAD pair trades on a softer note around 1.3670 during the early European session on Thursday. The US Dollar (USD) softens against the Canadian Dollar (CAD) amid lingering uncertainty over US economic policies and fresh concerns regarding potential tariff increases. The Canadian Gross Domestic Product (GDP) and US Producer Price Index (PPI) reports will be the highlights later on Friday. US Trade Representative Jamieson Greer on Wednesday stated that US President Donald Trump plans to raise this rate to 15% or higher for many countries in the coming days. This authority is limited to a 150-day window unless extended by Congress. Comments from Greer regarding potential tariff hikes have dampened confidence in the Greenback. Persistent geopolitical risks could boost crude oil prices and provide some support to the commodity-linked Loonie. It is worth noting that Canada is a major oil-exporting country, and high crude oil prices generally have a positive impact on the CAD. Traders will closely monitor the developments surrounding the US-Iran nuclear negotiations. US and Iranian officials are due to meet in Geneva on Thursday for a third round of indirect talks. All eyes will be on the US January PPI data on Friday. Economists expect the PPI to show a moderate increase of 0.3% MoM in January, compared to 0.5% recorded in December. The annual PPI is estimated to show a rise of 2.6% in January versus 3.0% prior. A “hotter-than-expected” reading could further dampen expectations for interest rate cuts and underpin the USD against the CAD in the near term. Canadian Dollar FAQs The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports.…
Filed under: News - @ February 26, 2026 7:29 am