- USD/CAD handles 1.4335 at its Late American Conference on Wednesday.
- The White House said Trump will delay tariffs in Canada and Mexico for a month.
- In February, private employers added only 77,000 jobs, as the ADP said.
The USD/CAD currency pair continued its descent to around 1.4335 during the late American session on Wednesday. The Canadian Dollar (CAD) gained ground against the US Dollar (USD) as market participants considered the possibility of relief for Canada from US tariffs. Investors are now awaiting key economic reports, including the US Initial Jobless Claims and Canadian Ivey Purchasing Managers Index, due on Thursday.
Trump Temporarily Exempts Canada from Auto Tariffs
On Wednesday, the White House announced that US President Donald Trump would exempt automakers in Mexico and Canada from newly imposed tariffs for one month. This follows Trump’s decision to introduce a 25% tariff on all imports from both countries as part of his customized trade policy. The exemption provided a boost to the Canadian Dollar, which gained momentum and weighed on the USD/CAD pair.
Weak US Employment Data Adds Pressure on the US Dollar
Concerns about the health of the US economy further pressured the Greenback. According to a report from Automatic Data Processing (ADP) on Wednesday, private sector employment in the US increased by 77,000 in February, a significant drop from the revised January figure of 186,000. The latest data fell short of initial forecasts, which predicted a growth of 140,000 jobs.
Crude Oil Prices and OPEC+ Decisions May Limit CAD Strength
Despite the Canadian Dollar’s recent gains, the ongoing drop in crude oil prices could limit its appreciation. Reports that OPEC+ plans to move forward with an oil output hike in April have weighed on the price of crude oil. As Canada is the largest exporter of oil to the US, lower crude oil prices typically exert downward pressure on the value of the CAD.
