Ella 
USD/CAD regained strong positive traction at the start of the new week and climbed towards the 1.4040 area during the Asian session, snapping a three-day losing streak amid a pickup in demand for the US dollar (USD).
U.S. President-elect Donald Trump’s tariff plans could drive up consumer prices and pave the way for the Federal Reserve to stop cutting interest rates. This, in turn, would spark a fresh rise in U.S. bond yields and help the greenback stage a nice recovery from the nearly three-week low hit on Friday, a key factor in favor of USD/CAD.
In fact, Trump threatened to impose 100% tariffs on the so-called “BRICS” — Brazil, Russia, India, China and South Africa. In addition, Trump’s promise to impose huge tariffs on the United States’ three major trading partners – Mexico, Canada and China – also cast a shadow over the slight rise in crude oil prices. In turn, this provides little support for the commodity-linked Canadian dollar and will not hinder USD/CAD’s upside.
The above fundamental background suggests that spot prices have minimal upward resistance, although traders may avoid aggressive bets ahead of this week’s important U.S. macro data. The U.S. ISM Manufacturing Purchasing Managers Index will be released later this Monday and may provide some impetus. However, the focus remains on Friday’s crucial non-farm payrolls (NFP) report.
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