USD/CAD recovers near 1.4350 on Trump and Trudeau reports

In early Asian trading on Tuesday, USD/CAD rebounded to around 1.4345. The U.S. dollar (USD) regained some ground after U.S. President-elect Donald Trump said his tariff policy would not be reduced. Investors will be closely watching developments in Canada's political uncertainty. In addition, the US December ISM Services Purchasing Managers Index (PMI) will be the focus on Tuesday.

Trump has denied reports that he is considering narrowing the tariff plan to a select group of goods and services. However, before Trump takes office, his tariff plans could trigger volatility in financial markets. Investors will be watching how aggressive Trump's tariff policy becomes after taking office.

Meanwhile, hawkish comments from U.S. Federal Reserve officials may provide some support for the dollar. Federal Reserve Governor Lisa Cook said on Monday that the U.S. central bank could remain cautious in cutting interest rates further given the strong economy and more stubborn inflation than expected.

In the Canadian dollar, Canadian Prime Minister Justin Trudeau is more likely to announce his resignation, but he has not yet made a final decision. A source told Reuters and The Globe and Mail they were unsure when Trudeau would announce his plans to resign, but expected it to be announced before an emergency meeting of Liberal MPs on Wednesday.