- The USD/CAD pair is expected to strengthen around 1.3855 in the early Asian trading session on Friday.
- President Trump has increased tariff rates on Canadian goods from 25% to 35%, according to a statement from the White House.
- Attention will be focused on the US Non-Farm Payroll (NFP) report scheduled for later on Friday.
The USD/CAD exchange rate is advised to rise close to 1.3855 early Friday in Asia. This increase comes as the US dollar (USD) is expected to strengthen against the Canadian dollar (CAD), following President Trump’s decision to raise tariffs on Canadian imports to 35%. There’s a buzz in the market about the US NFP report coming out later today, which should provide insights into the employment landscape.
The announcement from the White House late Thursday revealed that the new tariff, effective August 1, 2025, raises the charges up from the previous 25% rate.
As the news of higher tariffs sinks in, the US dollar seems to be attracting more buyers. This sets the stage for the US NFP report, which could deliver fresh insights about labor market trends and the outlook for interest rates.
On another note, the Bank of Canada (BOC) is maintaining a status quo with its interest rate at 2.75%, pointing to an economy that appears resilient, even amidst the ongoing trade tensions with the US. Governor Tiff Macklem mentioned that while they’re not raising rates now, they are still considering cuts if necessary, which could put some pressure on the CAD and may benefit USD/CAD pairs in the near term.
