USD/CAD recovers some lost ground to near 1.4350 on Trump and Trudeau reports

• USD/CAD rebounds to near 1.4345 in Tuesday's early Asian session. 
• Trump said the Washington Post story that he would pare back his tariff policy was wrong. 
• Trudeau is expected to announce stepping down as party leader before the national caucus meeting Wednesday. 

The USD/CAD pair recovers some lost ground to around 1.4345 during the early Asian session on Tuesday. The US Dollar (USD) pares declined after President-elect Donald Trump said that his tariff policy won't be pared back. Investors will closely watch the development surrounding political uncertainties in Canada. Also, the US ISM Services Purchasing Managers Index (PMI) for December will be in the spotlight on Tuesday. 

Trump denied the report that he is considering a tariff plan that will narrow the focus to a select set of goods and services. However, the threats around his tariff plans could trigger the volatility in financial markets until Trump's inauguration. Investors will monitor how aggressive Trump's tariff policies could be when he takes office.

Meanwhile, the hawkish comments from the US Federal Reserve (Fed) officials could provide some support to the Greenback. Fed Governor Lisa Cook noted on Monday that the US central bank can afford to be cautious with any further rate cuts given an economy that is strong and inflation that has been stickier than expected.

On the Loonie front, Canadian Prime Minister Justin Trudeau is more likely to announce his resignation, but he has yet to make a final decision. A source told Reuters and the Globe and Mail that they did not know definitely when Trudeau would announce his plans to step down but said they expect it would happen before an emergency meeting of Liberal legislators on Wednesday.