USD/CAD remains on the defensive below 1.3750 as the 'Sell America' theme continues

• USD/CAD weakens to around 1.3735 in Tuesday's early Asian session. 
• The US Dollar extends the decline as the 'Sell America' theme continues. 
• BoC rate cut expectations unchanged despite upbeat Canadian Retail Sales data. 

The USD/CAD pair remains on the defensive near 1.3735 during the early Asian session on Tuesday. The US Dollar weakens against the Canadian Dollar (CAD) as investors turn away from US assets. Traders will keep an eye on the Conference Board's Consumer Confidence report due later on Tuesday, followed by Durable Goods Orders and the Dallas Fed Manufacturing Index.

"The 'Sell America' theme is growing among investors after Moody's downgraded the creditworthiness of the US due to the mounting US national deficit. The downgrade, the budget bill, and the ongoing economic uncertainty triggered by US President Donald Trump's tariffs weigh on the USD broadly. 

"The 'Sell America' theme, which obviously was the dominant theme back in April, is back on show," said Ray Attrill, head of FX research at National Australia Bank.

Despite the upbeat Canadian Retail Sales in March, expectations for a rate cut from the Bank of Canada (BoC) in June have remained unchanged. Currency swap markets have priced in a 32% odds of a 25 basis points (bps) rate reduction by the BoC in the June meeting, according to Bloomberg.

Meanwhile, a decline in Crude Oil prices could weigh on the commodity-linked Loonie and help limit the pair's losses. It's worth noting that Canada is the largest oil exporter to the US, and lower crude oil prices tend to have a negative impact on the CAD value.