- USD/CAD struggles to gain ground near 1.4175 in Monday’s early Asian session.
- US tariff delays and weaker US Retail Sales data exert some selling pressure on the USD.
- Lower crude oil prices might weigh on the commodity-linked Loonie and create a tailwind for USD/CAD.
The USD/CAD pair remains on the defensive around 1.4175 on Monday during the early European session. The US Dollar (USD) weakens due to the delay in the US President Donald Trump administration’s tariff plans and the disappointing US January Retail Sales data. Investors will closely monitor the Canadian Consumer Price Index (CPI) inflation data for January, which is due later on Tuesday.
The weaker-than-expected US Retail Sales undermine the US Dollar (USD) broadly. The downtick in the statistic is likely weighted down by frigid temperatures, wildfires and motor vehicle shortages, suggesting a sharp slowdown in economic growth early in the first quarter.
Additionally, US President Donald Trump approved a proposal for reciprocal tariffs on Thursday but delayed their implementation as his administration conducts one-on-one negotiations with nations that could be impacted. This, in turn, contributes to the USD’s downside. Nonetheless, the rising expectation that the US Federal Reserve (Fed) would stick to its hawkish stance amid elevated inflation might act as a tailwind for the pair.
The decline in crude oil prices to a nearly two-month low amid hopes for a peace deal between Russia and Ukraine might drag the commodity-linked Canadian Dollar (CAD) lower against the Greenback. It’s worth noting that Canada is the largest oil exporter to the United States (US), and lower crude oil prices tend to have a negative impact on the CAD value.
