The USD/CAD pair extends its downside to 1.3650 in Friday’s European session. The Loonie asset comes under pressure as the US Dollar struggles to gain ground despite uncertainty ahead of the United States core Personal Consumption Expenditure Price Index (PCE) data for April, which will be published at 12:30 GMT.Economists expect that the core PCE inflation rose steadily by 0.3% and 2.8% on a monthly and an annual basis, respectively. Hot or expected inflation reading would weaken the case of Federal Reserve (Fed) lowering interest rates from the September meeting. The scenario would be favorable for the US Dollar and bond yields. While soft numbers will do the opposite.The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is subdued around 104.75. The USD Index came under pressure after downwardly revised Q1 Gross Domestic Product (GDP) estimate boosts hopes that the Fed will reduce interest rates at least once this year. US Bureau of Economic Analysis (BEA) reported that the economy expanded at a slower pace of 1.3% due to lower consumer spendings from the preliminary estimates of 1.6%.Meanwhile, the market sentiment is broadly risk-averse as China’s weak Manufacturing and Non-Manufacturing PMI data has raised concerns over global economic prospects. S&P 500 futures have posted some losses in the European session.In the neighbour nation, the Canadian Dollar will dance to the tunes of the monthly and Q1 GDP data, which will be published at 12:30 GMT. The Canadian economy is projected to have remained stagnant in March after expanding 0.2% in February. Weak GDP data would boost expectations for the Bank of Canada (BoC) to begin reducing interest rates from the June meeting. USD/CAD
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