Canadian Dollar Rises as US Court Blocks Trump Tariffs; Fed Minutes May Cap Gains

Market Overview: CAD Rises on Reduced Trade Tension

The Canadian Dollar (CAD) edged higher after a U.S. federal court struck down former President Donald Trump’s broad tariffs, labeling them unconstitutional. The decision reduced fears of prolonged trade disruption between the U.S. and Canada, offering support to the CAD.

According to analysts at Monex Europe, the verdict revives optimism for cross-border trade and improves sentiment around U.S. growth prospects, both of which typically support CAD valuations.

"The immediate reaction is rational due to the tight trade relationship between the U.S. and Canada. Reduced friction at the border is CAD-positive," said analysts at Monex.

Fed Minutes May Cap Canadian Dollar Strength

Despite the bullish reaction, Wednesday’s Federal Reserve (Fed) meeting minutes revealed that policymakers remain cautious and could keep rates higher for longer. This outlook has tempered expectations for a rapid CAD appreciation against the U.S. Dollar (USD).

At the time of writing, the USD/CAD is trading around 1.3829, down 0.1% on the day. Monex expects a further decline toward the 1.3800 level on Thursday.

What’s Next for USD/CAD?

Market participants will be closely watching:

• Follow-up actions from the White House on the tariff ruling.
• The Bank of Canada’s (BoC) upcoming policy signals.
• Continued reaction to Fed policy outlook.

Internal Links for Tredu.com

• How Tariff Rulings Impact North American Currency Pairs
• Latest USD/CAD Technical Analysis
• What Fed Minutes Mean for Global FX