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• USD/CAD softens to around 1.4430 in Thursday’s late American session. 
• US annual PPI inflation declined to 3.2% in February, softer than expected. 
• Canada's Finance Minister said the country agreed to maintain dialogue. 

The USD/CAD pair weakens to near 1.4430 during the late American session on Thursday, pressured by lower US yields. However, lower crude oil prices might weigh on the commodity-linked Loonie and help limit the pair’s losses. The preliminary Michigan Consumer Sentiment will take center stage on Friday.

The concerns about slowing growth in the US economy from US President Donald Trump's administration's trade policies could exert some selling pressure on the Greenback. Data released by the US Bureau of Labor Statistics on Thursday showed that the US Producer Price Index (PPI) rose 3.2% on a yearly basis in February, compared to the 3.7% increase recorded in January. This figure came in below the market expectation of 3.3%.

Meanwhile, the annual core PPI rose 3.4% in February versus 3.8% in January. On a monthly basis, the PPI was unchanged, while the core PPI declined by 0.1%.

Canada's Finance Minister Dominic LeBlanc said on Friday tariffs are harmful to both the United States and Canada, adding that moving forward with dialogue is crucial. Traders will closely monitor the developments surrounding Trump’s tariff policy. Any signs of an escalating trade war could undermine the Canadian Dollar (CAD) against the USD. 

On Wednesday, the Bank of Canada (BoC) cut its benchmark interest rate by 25 basis points (bps), bringing it down to 2.75%. This was the BoC’s seventh consecutive interest rate cut. A move that comes just hours after US President Donald Trump issued new steel and aluminum tariffs against Canada. 

BoC governor Tiff Macklem said during the press conference that the central bank would "proceed carefully with any further changes," needing to assess both the upward pressures on inflation from higher costs in a trade war and the downward pressures from weaker demand.

Meanwhile, a decline in crude oil prices on the back of steady tariff concerns could weigh on the commodity-linked Canadian Dollar (CAD). It’s worth noting that Canada is the largest oil exporter to the United States (US), and lower crude oil prices tend to have a negative impact on the CAD value.

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