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• USD/CAD holds steady around 1.4045 in Tuesday’s early Asian session.
• US ISM Manufacturing PMI rose to 48.4 in November vs. 46.5 prior.
• Canadian Manufacturing PMI climbed to a 21-month high in November.

The USD/CAD pair trades flat near 1.4045 during the early Asian session on Tuesday. However, Trump’s threats of further tariffs and renewed US Dollar (USD) demand could provide some support to the pair. The US JOLTs Job Openings for October are due later on Tuesday. The Federal Reserve’s (Fed) Adriana Kugler and Austan Goolsbee are scheduled to speak.

Data released Monday showed that the US ISM Manufacturing PMI improved to 48.4 in November from 46.5 in October. This reading came in better than the market expectation of 47.5. The Greenback edges higher in an immediate reaction to the upbeat US economic data.

Furthermore, the cautious stance of the US Fed might contribute to the USD’s upside. Fed officials on Mondays made it clear they expect the central bank to continue lowering interest rates over the next year but stopped short of saying they are committed to making the next cut in the December meeting. According to the CME FedWatch Tool, money markets have priced in nearly a 76.0% chance that the Fed will cut rates by a quarter point in December, while there is a 24.0% probability that the policy rate will remain unchanged.

On the Loonie front, the Canadian S&P Global Manufacturing PMI came in stronger than expected in November, rising to 52.0 from 51.1 in October, its highest level since February 2023. This figure was above the market consensus of 50.8. However, US President-elect Donald Trump's tariff threats could exert some selling pressure on the Canadian Dollar (CAD) as Trump threatened to impose a 25% tariff on all Canadian imports.

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