USD/CAD drifts lower to near 1.4300 as Canada's Justin Trudeau announces resignation as Prime Minister

• USD/CAD weakens to around 1.4310 in Tuesday's early European session. 
• Justin Trudeau announced his resignation as Canada's Prime Minister, supporting the Loonie. 
• Hawkish Fed expectations might help limit the pair's losses. 

The USD/CAD pair edges lower to near 1.4310 during the early European session on Tuesday. The Canadian Dollar (CAD) strengthens against the Greenback after a report that Canadian Prime Minister Justin Trudeau would resign.

On Monday, Reuters reported that Justin Trudeau would announce his plans to step down but said it expected it would happen before an emergency meeting of Liberal legislators on Wednesday. "News that Justin Trudeau will resign is helping to underpin loonie gains," said Nick Rees, senior FX market analyst at Monex Europe Ltd. 

The Globe and Mail, a Canadian media outlet, stated on Tuesday that the federal government is weighing the early release of a proposed list of American goods that would be targeted by retaliatory Canadian tariffs if the incoming US President Donald Trump imposes a 25% tax on all products from Canada. 

Investors will monitor how aggressive Trump's tariff policies could be when he takes office. Meanwhile, the US Federal Reserve (Fed) is more likely to keep interest rates steady in the next meeting, which might support the Greenback. According to the CME FedWatch tool, markets are pricing in just 7.5% odds of a 25 basis points (bps) rate cut at the January Fed meeting.