The US dollar strengthened against the Canadian dollar on Monday as traders braced for Federal Reserve Chair Jerome Powell's testimony this week. President Trump's announcement of new tariffs on steel and aluminum imports further weighed on the Canadian dollar, as Canada is a major exporter of these metals to the US.
The USD/CAD currency pair strengthened to approximately 1.4320 during Monday's late American trading session. The US Dollar (USD) gained ground amidst economic uncertainty and tariff concerns. Federal Reserve (Fed) Chair Jerome Powell 's semi-annual testimony, scheduled for Tuesday, is anticipated to be a key market event.On Sunday, President Trump announced his intention to impose 25% tariffs on all steel and aluminum imports into the United States, in addition to existing metal tariffs.
This followed his Friday statement that he would announce reciprocal tariffs on numerous countries by Monday or Tuesday, without specifying which nations would be affected. The apprehension surrounding the potential impact of these new trade levies exerted downward pressure on the Canadian Dollar (CAD), also known as the Loonie, as Canada is a major exporter of steel and aluminum to the United States.Traders now predict that the Federal Reserve will lower interest rates only once this year, revising earlier expectations of two rate cuts commencing in June. This adjustment follows a report indicating a robust labor market and a survey revealing an increase in consumer inflation expectations. Powell's testimony before the Senate Banking Committee on Tuesday and the House Financial Services panel on Wednesday is expected to lend further support to the USD against the CAD. The Fed's cautious stance is likely to bolster the US Dollar
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