The US Dollar weakens ahead of Michigan Consumer Sentiment Index release for August. Traders anticipate a 25 basis point rate cut at Fed’s next meeting in September.
USD/CAD halts gains, trading around 1.3720 during Asian hours on Friday. Canadian Dollar (CAD) gets support from improved risk-on mood following stronger-than-expected US Retail Sales recovery, easing recession concerns in the US.
Commodity-linked CAD may continue to advance as crude Oil prices poised to end week higher, with recent US economic data boosting optimism over demand in top Oil-consuming nation. Price of West Texas Intermediate (WTI) oil trading near $76.60 per barrel at the time of writing.
In the US, traders await US Michigan Consumer Sentiment Index for August and Building Permits for July to be released later in North American session on Friday.
US Dollar depreciates as traders fully price in a 25 basis point rate reduction by US Federal Reserve for September. However, 50 basis point cut remains a possibility.
The Greenback receives support following better-than-expected US figures released on Thursday, with US Retail Sales climbing 1.0% month-over-month in July and Initial Jobless Claims reaching 227,000 for the week ending August 9.
Analysis:
The Canadian Dollar (CAD) is influenced by factors such as interest rates set by Bank of Canada, Oil prices, economy health, inflation, and Trade Balance. Higher Oil prices and positive US economic data can boost CAD value. Traders anticipate Fed rate cut in September, affecting USD/CAD pair. Understanding these factors can help individuals make informed decisions about their finances and investments.