USD/CAD flat lines near 1.3700, US/Canadian CPI inflation data in focus

• USD/CAD trades flat around 1.3705 in Tuesday's early Asian session. 
• Tariff threats could weigh on the Loonie, but stronger Canadian June job data might cap its downside. 
• The CPI inflation data for June from the US and Canada will be in the spotlight later on Tuesday. 

The USD/CAD pair holds steady around 1.3705 during the early Asian session on Tuesday. Traders largely shrugged off fresh tariffs ahead of Consumer Price Index (CPI) inflation data from the United States (US) and Canada on Tuesday.

Last week, US President Donald Trump announced a 35% tariff rate for goods imported from Canada, beginning August 1. The new measures come on top of existing 50% tariffs on Canadian steel and aluminum. Additionally, Trump also imposed a new 50% tariff on US copper imports, beginning on the same period. Concerns that US tariffs would impact the Canadian economy could undermine the Loonie, as Canada is a major trading partner and a significant supplier of copper to the US.

On the other hand, the upbeat Canadian June employment data could boost the Canadian Dollar (CAD) against the Greenback. Statistics Canada revealed on Friday that the Unemployment Rate in Canada ticked lower to 6.9% in June from 7.0% in May. This figure came in stronger than the 7.1% expected. Meanwhile, the Canadian economy added 83.1K jobs in June versus 8.8K prior. Economists were expecting no change in employment. 

Money markets have priced in nearly an 84% chance that the Bank of Canada will hold the interest rate in the July meeting, according to Reuters. The BoC is anticipated to reduce rates in the second half of the year. Still, it will be difficult for BoC policymakers to chart a rate path, given all the economic uncertainty.