• USD/CAD struggles to gain any meaningful traction, though the downside remains limited.
• Rebounding US bond yields help revive USD demand and act as a tailwind for the major.  
• Weaker Oil prices undermine the Loonie and also lend support amid Trump’s tariff threats.

The USD/CAD pair remains on the defensive for the second straight day on Thursday, albeit it manages to hold above the 1.4000 psychological mark through the Asian session. Moreover, the fundamental backdrop warrants some caution before positioning for an extension of this week's pullback from the 1.4175-1.4180 region, or the highest level since April 2020.

US President-elect Donald Trump earlier this week pledged to impose big tariffs on all products coming into the US from Mexico and Canada, which would end a regional free trade agreement and trigger trade wars. Furthermore, Crude Oil prices languish near the weekly low amid concerns about slowing fuel demand growth in the US and China – the world's top consumers. This, in turn, is seen undermining the commodity-linked Loonie and acting as a tailwind for the USD/CAD pair amid the emergence of some US Dollar (USD) dip-buying.

Wednesday's US macro data dump pointed to a still resilient US economy and stalling inflation progress, suggesting that the Federal Reserve (Fed) might be cautious on further interest rate cuts. This triggers a fresh leg up in the US Treasury bond yields and assists the USD Index (DXY), which tracks the Greenback against a basket of currencies, in reversing a part of the previous day's slide to a two-week low. Apart from this, geopolitical risks benefit the safe-haven buck and turn out to be another factor lending support to the USD/CAD pair.