USD/CAD Volatile as Supreme Court Strikes Down Trump Tariffs, GDP Misses

The US dollar faces significant headwinds after the Supreme Court ruled against Trump's tariff authority, while a string of disappointing economic data compounds bearish pressure. US Q4 advance GDP came in at just +1.4%, sharply below the +3.0% consensus, signaling a marked slowdown in economic growth. December PCE inflation printed at +2.9% versus +2.8% expected, keeping price pressures slightly elevated and complicating the Fed's policy outlook. Fed's Logan noted increased inflation uncertainty due to tariffs, adding to market unease. Trump announced plans to invoke a 10% Section 122 global tariff, injecting fresh geopolitical risk. The University of Michigan sentiment index disappointed at 56.6 versus 57.3 expected, and manufacturing PMI slipped to 51.2 against a 52.6 forecast. Canadian retail sales for December fell -0.4%, marginally better than the -0.5% estimate, offering mild CAD support. The Atlanta Fed's Q1 GDP Now estimate stands at 3.1%, providing a counterbalance. Traders should monitor USD pairs closely as tariff uncertainty, weak growth data, and sticky inflation create a complex trading environment with elevated volatility.