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The USD/CAD pair trades with mild losses near 1.3815, snapping the seven-day winning streak during the early Asian session on Friday. However, the pair currently trades near the highest level since April 17 after the Bank of Canada (BoC) reduced its key borrowing rates again at its July meeting. The US Personal Consumption Expenditures (PCE) – Price Index for June will take centre stage later on Friday.
Data released by the Commerce Department showed on Thursday that an initial estimate of US Real Gross Domestic Product (GDP) during the April-through-June period, expanded at a 2.8% annualized pace adjusted for seasonality and inflation. This figure came in better than the market expectation of 2.1% following a 1.4% rise in the first quarter.
Currently, there’s a 92.8% chance that the US Federal Reserve (Fed) will maintain its benchmark interest rate between 5.25% and 5.50% at the upcoming July meeting next week, according to the CME FedWatch Tool. Nonetheless, the release of the US PCE on Friday might offer some hints about the Fed interest rate path. The softer reading could weaken the Greenback and cap the pair’s upside.
The Canadian Dollar (CAD) remains under selling pressure as investors expect the Bank of Canada (BoC) to continue to ease policy after its latest interest rate cut on Wednesday. Financial markets expect one more 25 bps rate cut this year, with nearly 60% odds that the BoC will cut rates again in its September meeting. Meanwhile, the recovery of crude oil prices might provide some support to the commodity-linked Canadian Dollar. Higher oil prices generally lift the CAD as Canada is the leading exporter of Oil to the United States (US). More By This Author:NZD/USD Remains Weak Below 0.5900, All Eyes On US PCE Data
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