- The Canadian Dollar whipsawed on Friday, moving in both directions before settling flat.
- The Trump administration remains committed to sweeping tariffs on Canadian goods.
- More tariff threats come on the heels of deteriorating US economic data.
The Canadian Dollar was dragged in both directions on Friday, rising and then falling as market flows clash with fresh threats of tariffs on Canada from US President Donald Trump. Market sentiment is evaporating as the Trump administration barrels toward its self-imposed deadline of April 2 for a wide package of ever-changing tariffs that still remain light on firm details.
Friday was heavy on the US side of the economic data docket, with core US Personal Consumption Expenditure (PCE) Price Index inflation rising in February, crippling rate cut hopes and also flashing warning signs that inflation may remain above targets for far longer than expected. US consumer sentiment measures also tumbled as consumer turn increasingly negative on the Trump administration’s handling of the economy in general, and more specifically international trade.
Daily digest market movers: Canadian Dollar whipsaws as tariff threats weigh on Loonie
- The Canadian Dollar rose early on Friday after the Greenback declined, before slumping back after President Trump reiterates his intent to go through with tariffs on Canada.
- US core PCE Price Index inflation ticked higher in February, climbing to 2.8% YoY.
- University of Michigan Consumer Sentiment Index fall to a two-year low at 57.0, and UoM Consumer 5-year Inflation Expectations also climbed again to 4.1%.
- Despite deteriorating consumer sentiment, and inflation figures already beginning to rise in anticipation of tariffs, President Trump took the time to insist that he will be going ahead with sweeping tariffs on Canada.
- Next week will be a slow burn as investors keep an eye on trade headlines in the runup to the Trump administration’s April 2 tariff deadline. US Nonfarm Payrolls (NFP) and Canadian labor figures are also due next Friday.
Canadian Dollar price forecast
The Canadian Dollar continues to grind through a rough consolidation phase that has stretched on for months. USD/CAD has returned to familiar technical levels just above 1.4300, with bids mired in the 50-day Exponential Moving Average (EMA) at 1.4320.
USD/CAD daily chart
