The Bank of Canada (BOC) recently met market expectations by cutting its policy rate by 25 basis points to 2.75%. This decision reflects growing concerns over pervasive uncertainty stemming from fluctuating US tariffs, impacting consumer confidence and business investment plans.

According to analysts at BBH, this rate cut is part of a broader strategy to stimulate the Canadian economy amidst ongoing trade tensions. Traders are now looking for signs of further economic stability as they navigate the USD/CAD pair in the wake of these developments.

The USD/CAD exchange rate will remain sensitive to further announcements from the BOC and economic indicators that reflect the health of both the Canadian and US economies. It will be interesting to see how this unfolds in the coming weeks.