The USD/CAD pair is trading around 1.3510 in the Asian session on Monday, facing selling pressure. The US Dollar is weakening after Federal Reserve Chair Jerome Powell hinted at upcoming interest rate cuts starting in September.
Powell’s remarks, along with other dovish messages from Fed officials, are supporting expectations for rate cuts next month. This is leading to a broad decline in the Greenback in recent sessions. Powell stated, “The time has come for policy to adjust,” and emphasized that the timing of rate cuts will depend on incoming data and the evolving outlook.
Meanwhile, Canadian Retail Sales data for June showed a decline of 0.3% MoM, in line with market expectations. Retail Sales excluding automobiles unexpectedly rose by 0.3% MoM, surpassing estimates of a 0.2% decline.
Looking ahead, market participants will be monitoring the Canadian GDP data for the second quarter, scheduled for release on Friday. The Bank of Canada is also expected to cut rates further by the end of the year.
Canadian Dollar FAQs
The Canadian Dollar (CAD) is influenced by factors such as interest rates set by the Bank of Canada, the price of Oil, the health of the economy, inflation, and the Trade Balance. Market sentiment and the US economy also play significant roles in shaping the CAD’s value.
The Bank of Canada’s decisions on interest rates impact the CAD, with higher rates typically being positive for the currency. Oil prices, as Canada’s main export, have an immediate effect on the CAD. Inflation, macroeconomic data, and global economic conditions also influence the Canadian Dollar.