- The USD/CAD exchange rate is expected to reach around 1.3855 in early Asian trading on Wednesday.
- Weak economic indicators from Canada, along with ongoing tariff uncertainties, are putting pressure on the Canadian dollar.
- Recent data shows that U.S. employment growth was significantly lower in the year leading up to March than previously estimated.
On Wednesday morning, the USD/CAD pair looks set to rise toward 1.3855. The Canadian Dollar (CAD) is struggling against the US Dollar (USD) as trade uncertainties continue to impact the Canadian economy. The focus will be on the U.S. Producer Price Index (PPI) inflation data slated for release later in the day.
Current uncertainties regarding Canada’s economic outlook have fueled increased bearish sentiments among investors. The recent employment figures revealed that U.S. tariffs have put a damper on job growth, affecting key sectors. Canada’s unemployment rate reached 7.1% in August, climbing from 6.9% the previous month.
While Canada has beneficial trade agreements and favorable tariff rates, the ongoing uncertainty around tariffs in different sectors continues to cloud the medium-term economic outlook.
At the same time, there are rising expectations that the U.S. Federal Reserve might implement significant rate cuts during its September meeting, which could weaken the dollar. The employment growth in the U.S. was lower than anticipated in the past year. A recent revision suggests that payroll numbers might be adjusted down by a considerable 911,000 (0.6%). Traders are looking forward to the PPI inflation data for insights ahead of the upcoming Consumer Price Index (CPI) report.
