Ella 
USD/CAD held gains for a second straight session, trading around 1.3840 during Wednesday’s Asian session. The pair remains supported as the U.S. dollar (USD) benefits from renewed optimism over U.S.-China trade progress. Market focus now turns to the release of the U.S. personal consumption expenditures (PCE) price index for March and Canada’s GDP data for February, both due later in the day.
Sentiment was helped by news that U.S. President Donald Trump indicated a willingness to reduce tariffs on Chinese goods, while China announced exemptions from its 125% tariff on certain U.S. imports. The developments raised hopes that a resolution to the long-running trade dispute between the world’s two largest economies may be nearing.
Meanwhile, U.S. labor data on Tuesday showed some weakness, with the Job Openings and Labor Turnover Survey (JOLTS) showing job openings fell to 7.19 million in March, down from a revised 7.48 million in February and below market expectations of 7.5 million. This was the lowest level since September 2024, suggesting that labor demand is cooling amid rising economic uncertainty.
The Canadian dollar (CAD) came under pressure as investors digested the impact of the Liberal Party’s minority victory. Prime Minister Mark Carney now needs to seek support from a coalition government to govern, which could lead to targeted fiscal spending commitments.
Meanwhile, the Bank of Canada (BoC) decided to keep its benchmark interest rate unchanged at 2.75%, citing persistently high core inflation and the dual risks of a US-led recession or economic stagnation if tariffs are removed, which reduced market expectations for any imminent rate cuts.
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