- USD / CAD was unable to retain its modest intraday gains in the 1.2470-75 region.
- The sustained selling bias of the USD was seen as a key factor that acted as a headwind.
- Mixed macroeconomic data from the US, Canadian GDP failed to provide a significant boost.
The pair USD / CAD it was stable near the 1.2430-35 region, or during the two-week lows, and had a fairly subdued reaction to US / Canadian macro data.
The pair struggled to capitalize on its positive intraday move, instead finding new offers near 1.2470-75 amid the prevailing selling bias of the US dollar. The bulls seemed rather unimpressed by a softer tone around crude oil prices, which tend to undermine the commodity-pegged Canadian dollar.
The US dollar remained on the defensive near a month-long lows amid firm expectations that the Fed would maintain its ultra-loose monetary policy stance for a longer period. It’s worth remembering that Fed Chairman Jerome Powell emphasized that they were far from making substantial progress in employment.
On the economic data front, the US core PCE price index, the Fed’s preferred gauge of inflation, rose to 3.5% yoy in June, disappointing expectations of a 3.7% reading. This, to a greater extent, offset an unexpected increase in personal income and better-than-expected expense data.
Meanwhile, Canada’s monthly GDP report showed that economic activity contracted 0.3% month-on-month in May. This, coupled with a modest pullback in crude oil prices, prevented traders from placing aggressive bullish bets on the loonie and helped limit deeper losses for the USD / CAD pair.
Friday’s US economic record also includes the Chicago PMI release and the revised Michigan Consumer Sentiment Index, although it is unlikely to provide a significant boost to the USD / CAD pair. That said, USD / oil price dynamics could still contribute to generating some trading opportunities.
Technical levels
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
