USD/CAD extends upside to near 1.4350 ahead of US GDP release

• USD/CAD gains traction to around 1.4340 in Wednesday's late American session. 
• Lower crude prices and renewed US tariff threats exert some selling pressure on the Canadian Dollar.
• Fed officials need a clear signal before deciding on the next moves. 

The USD/CAD pair extends the rally to near 1.4340 during the late American session on Wednesday. A decline in crude oil prices continues to weigh on the commodity-linked Canadian Dollar (CAD). The US weekly Initial Jobless Claims are due later on Thursday, along with the estimate of Q4 Gross Domestic Product (GDP) for the fourth quarter (Q4). 

Crude oil prices fall to a two-month low amid raising supply concerns as prospects for a peace deal between Russia and Ukraine are improving. This, in turn, undermines the commodity-linked Loonie as 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.

Furthermore, the renewed US tariff threats weigh on the CAD and act as a tailwind for USD/CAD. US President Donald Trump confirmed plans to impose 25% tariffs on Canadian goods and 10% on Canadian energy exports by March, reversing earlier delays tied to Canada's border security measures. "It's another month, which is obviously good news for Canada, but the tariff uncertainty is a real drag on the Canadian economy," said Adam Button, chief currency analyst at ForexLive.

The US Dollar (USD) rebounds from 11-week lows as traders assess the strength of the economy and tariff outlook. Richmond Federal Reserve (Fed) President Tom Barkin said on Tuesday that he will follow a wait-and-see approach regarding Fed interest rate policy until it is clear inflation is returning to the central bank's 2% goal given the current uncertainty surrounding the economy.

The Fed officials are scheduled to speak later in the day, including Michelle Bowman, Beth Hammack and Patrick Harker. The hawkish comment from policymakers could lift the USD against the Canadian Dollar (CAD) in the near term.