Bank of Canada holds rates at 2.75% amid Trump tariff uncertainty

The Bank of Canada maintained its policy rate at 2.75% as expected, adopting a cautious stance while assessing potential impacts from threatened US tariffs under the Trump administration. USD/CAD traded relatively stable around 1.4350 following the announcement, with the Canadian dollar finding support from the central bank's wait-and-see approach. The BoC highlighted concerns about trade policy uncertainty and its potential effects on Canadian economic growth and inflation dynamics. Markets are pricing in limited rate movement in the near term as policymakers navigate the complex trade environment. The decision reflects growing challenges for commodity-linked currencies facing protectionist pressures. Technical analysis shows USD/CAD consolidating within a 1.4300-1.4400 range, with a breakout likely dependent on concrete tariff developments. Traders should monitor US-Canada trade negotiations closely as any escalation could significantly impact the loonie's trajectory against the greenback.