BUZZ-COMMENT-Another tariff deadline approaches for Canadian dollar

Feb 24 (Reuters) - The deadline for the delayed 25% tariffs on Canadian goods is one week away (March 4), which in turn will see elevated headline risk for CAD in the short-term. Looking at where USD/CAD is trading – 1.4200 – it appears that markets are rather sanguine over tariff risks.

Remember that leading into the U.S. inauguration, USD/CAD had been hovering around 1.4400. Although there has been an element of tariff fatigue amid the tariff on/tariff off actions, the risk that the Trump administration could deliver on its threat means the path of least resistance heading into the deadline is skewed to the topside for the pair.

For those looking for a rebound in USD/CAD, encouragement can be taken from the pair finding a floor at 1.4150-78. Unless there are headlines that tariffs will not be imposed, it is likely this area will hold in the lead-up to the deadline.

Since the beginning of this month, few updates have been given on whether the 25% levies will go ahead or not, which leaves the door ajar for a move towards 1.4300 ahead of the deadline. Meanwhile, should we see headlines that tariffs will be imposed, this would likely leave the pair at 1.47-1.48 in short order.

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