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USD/CAD slips as Trump pauses Canada tariff plan for three days
The Canadian dollar fell around 0.6% to about 1.3810 as oil prices rose, while traders looked to upcoming FOMC minutes for more clues on US policy.
USD/CAD declined on Wednesday, trading near 1.3810, down 0.62% for the day, as investors weighed a short tariff pause and higher oil prices, FXStreet reports. The Canadian dollar gained some relief after US President Donald Trump decided to pause the implementation of 50% tariffs against Canada for three days following negotiations with Canadian Prime Minister Mark Carney.
FXStreet said the temporary suspension eased immediate concerns about US-Canada trade relations, though the brief nature of the pause left uncertainty about the ultimate outcome of talks. Rising crude oil prices also supported the CAD, with the article noting Canada’s role as a major energy supplier to the United States.
The outlet added that US dollar weakness persisted after the pair hit a two-month low on Monday, amid signs of cooling inflation and slowing consumer spending. It also flagged that energy-driven inflation risks could keep the Federal Reserve in a restrictive stance, which could help limit how far the greenback falls.
Attention is set on the Federal Open Market Committee minutes due on Wednesday, FXStreet said. According to the CME Group FedWatch Tool cited by the outlet, markets see about a 68% chance of a Fed rate hike by the end of the year, with investors watching for whether policymakers remain concerned about inflation or become more cautious on timing.
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