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• USD/CAD trades with mild gains near 1.3685 in Thursday’s early Asian session. 
• Most Fed officials anticipated that rate cuts would be appropriate later this year, according to the minutes. 
• The US weekly Initial Jobless Claims will be the highlight later on Thursday. 

The USD/CAD pair posts a modest gain around 1.3685 during the early Asian session on Thursday, bolstered by a firmer US Dollar (USD). Traders will closely monitor negotiations between the United States and its trading partners. The US weekly Initial Jobless Claims is due later on Thursday.  

US President Donald Trump unveiled a new round of tariff demand letters on Wednesday, raising concerns about a renewed global trade war. The flood of letters and additional tariff threats represented the latest development in a dizzying trade agenda that has caused volatility in markets. This, in turn, weighs on the riskier assets like the Canadian Dollar (CAD) and creates a tailwind for the pair. 

The Minutes from the June 17-18 meeting released on Wednesday indicated that policymakers largely held to a wait-and-see position on future rate moves. The meeting ended with Federal Open Market Committee (FOMC) members voting unanimously to leave the key borrowing rate unchanged in a range between 4.25%-4.50%, where it has been since December 2024. Most participants at the July meeting saw some reduction in the Fed funds rate this year as appropriate, meeting minutes show.

Meanwhile, a recovery in Crude Oil prices could underpin the commodity-linked Loonie in the near term. It’s worth noting that Canada is the largest oil exporter to the US and higher crude oil prices tend to have a positive impact on the CAD value. 

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