• USD/CAD trades with a mild positive bias around 1.3990 in Tuesday’s early Asian session. 
• The US Dollar eases from a two-year high amid the profit-taking. 
• Lower crude oil prices undermine the commodity-linked Loonie. 

The USD/CAD pair trades with mild gains near 1.3990 during the early Asian session on Tuesday. The sell-off in crude oil prices weighs on the commodity-linked Canadian Dollar (CAD) and acts as a tailwind for USD/CAD. Trading volumes are likely to be low due to the US Thanksgiving holiday on Thursday.

The US Dollar Index (DXY) retreated to two-day lows due to profit-taking as the Trump Trade remains alive. Donald Trump announced on Friday that he will nominate Scott Bessent to be the secretary of the US Department of the Treasury. “Some market participants see him as less negative about a trade war, considering his comments on a phased approach for implementing tariffs,” said UBS Commodity Analyst Giovanni Staunovo.

Traders pared back their expectations for an interest rate cut in December. According to the CME FedWatch Tool, futures traders are now pricing in a 55.9% odds that the Fed will cut rates by a quarter point, down from around 69.5% a month ago. The FOMC Minutes will be in the spotlight on Tuesday, along with the Conference Board’s Consumer Confidence, New Home Sales, the Richmond Fed Manufacturing Index, and the Dallas Fed Services Index.