USD/CAD, AUD/USD and EUR/CAD analysis – February 4, 2025

For more market insight, go to

Tariffs remain the hot topic in the markets. A last minute decision to postpone 25% tariffs on Canada and Mexico by Trump following discussions with the leaders of countries, sent risk assets higher and relieved pressure on the Canadian dollar and Mexican peso on Monday. However, a 10% tariff on China took effect today, with Beijing retaliating with new tariffs of its own on selected US imports. Therefore, the threat of a trade war between the world’s largest economies remains, even if deals with America’s neighbouring countries suggest Trump is willing to negotiate on making deals that work for all parties. However, striking deals with China and the eurozone might be a lot more complicated and will take longer than it did in the case of Canada and Mexico. After all, for those countries it was just a matter of border security that was the main issue. For China and the Eurozone, it is a lot more than that. Therefore, markets may remain in a cautious mode for a while yet. For FX, this means that pairs like the EUR/CAD may ease back further following yesterday’ decision by Trump to delay the tariffs on Canada. That decision means the near-term Canadian dollar forecast is no longer bearish, making the EUR/CAD an ideal pair to look for bearish setups on for CAD bulls. Meanwhile, USD/CAD is beginning to look rather interesting, though a further bout of bearish price action would be required to firmly shift momentum in favour of the bears in the near term.