USD/CAD falls to near 1.4250, FOMC minutes in focus

In late U.S. trading on Tuesday, the USD/CAD currency pair fell slightly to around 1.4255. The Canadian dollar (CAD) strengthened against the U.S. dollar (Greenback) as investors weighed the prospects for global negotiations on U.S. trade tariffs. The FOMC minutes will be in focus later on Wednesday. In addition, Thomas Barkin of the Federal Reserve (Fed) will also speak.

The U.S. Customs and Border Protection agency said on Tuesday it was preparing to begin collecting country-specific tariffs on 86 U.S. trading partners. Trump noted that he was not considering suspending plans to implement broad additional tariffs on dozens of countries even as trading partners sought to avoid them, but signaled he was willing to engage in some negotiations.

Trump last week unveiled plans to impose a minimum tariff of 10% on all imports. He also previously imposed 25% tariffs on goods from Mexico and Canada, and a 10% tariff on Canadian energy imports. However, he subsequently announced some exemptions and delays. Concerns about easing trade tensions between the United States and Canada provided some support to the Canadian dollar.

Meanwhile, the decline in crude oil prices could put some selling pressure on the commodity-linked Canadian dollar. It’s worth noting that Canada is the largest exporter of oil to the United States, and lower crude prices tend to have a negative impact on the value of the Canadian dollar.