The Canadian Dollar (CAD) faced challenges in gaining momentum against the Greenback as markets remained cautious ahead of key US inflation data and the Federal Reserve’s upcoming rate decision. Despite a brief uptick on Thursday, CAD’s progress was limited.
Canada is scheduled to release its latest Gross Domestic Product (GDP) figures on Friday. However, the focus is likely to shift to US Personal Consumption Expenditure Price Index (PCE) inflation data, which could overshadow CAD flows and impact the Fed’s rate cut decision in September.
Key Market Movers Today
- US GDP figures for Q2 exceeded expectations, growing at 3.0% on an annualized basis.
- Canadian Q2 GDP forecasted to decrease to 1.6% from 1.7%, with a slight dip in the MoM figure for June.
- Friday’s US PCE inflation data expected to show a slight increase, potentially affecting the Fed’s rate cut decision.
Canadian Dollar Price Forecast
Amid a technical correction against the USD, the CAD is aiming for further gains as markets lean towards a USD-negative stance. The USD/CAD pair is hovering below the 1.3500 handle, with a drop below the 200-day Exponential Moving Average (EMA).
USD/CAD Daily Chart
Analysis:
The Canadian Dollar is facing challenges in gaining momentum against the US Dollar due to cautious market sentiment and upcoming US inflation data. Investors are closely watching the impact of these economic releases on the Federal Reserve’s rate decision, which could influence currency flows and trade opportunities. Understanding these factors is crucial for individuals looking to navigate the forex market and make informed investment decisions.