- USD/CAD witnesses buying interest below 1.3700 as the US Dollar rises further.
- The Fed is expected to begin lowering interest rates in September.
- Investors see the Canadian Retail Sales coming out of contraction trajectory.
The USD/CAD pair rebounds strongly after sliding slightly below the crucial support of 1.3700 in Friday’s European session. The Loonie asset recovers as the US Dollar (USD) exhibits strength on prospects that the Federal Reserve (Fed) will lag behind its peers in an attempt to commence its policy-easing process.
Market sentiment remains uncertain as global PMIs have underperformed against expectations. S&P 500 futures have posted some losses in the London session. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, jumps to six-week high near 105.90.
Currently, financial markets expect that the Fed will start reducing interest rates from the September. On the contrary, various central banks including the Bank of Canada (BoC) has already pivoted to policy normalization.
Meanwhile, investors await the preliminary United States (US) S&P Global PMI data for June, which will be published at 13:45 GMT. The Manufacturing and Services PMI are expected to have expanded at a slower pace. The PMI data will indicate the economic health of the economy, which investors expect is off from a strong outlook amid deepening consequences of higher interest rates by the Fed.
On the Loonie front, the Canadian Dollar will dance to the tunes of the Canada’s Retail Sales data for April, which will be published at 12:30 GMT. On month, the Retail Sales are expected to have risen by 0.7% after contracting straight for three months. The Retail Sales data is a measure to consumer spending, which provide cues about the inflation outlook.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD targets yearly highs beyond 1.1100
Significant losses in the US Dollar allow EUR/USD to edge closer to its yearly highs, comfortably trading beyond the 1.1100 level after US inflation and jobs data releases.
GBP/USD meets a decent barrier near 1.2950
GBP/USD secures its third straight day of gains, smashing well past the 1.2900 yardstick and reaching new weekly highs, fueled by the increasing selling pressure in the Greenback.
Gold looks consolidative around $3,130 after US data
Following US data releases, Gold prices now seem to have embarked on a consolidative range near the $3,130 mark. This robust performance comes amid a pronounced bearish bias in the Greenback and mixed US yields.
Cardano stabilizes near $0.62 after Trump’s 90-day tariff pause-led surge
Cardano stabilizes around $0.62 on Thursday after a sharp recovery the previous day, triggered by US Donald Trump’s decision to pause tariffs for 90 days except for China and other countries that had retaliated against the reciprocal tariffs announced on April 2.
Trump’s tariff pause sparks rally – What comes next?
Markets staged a dramatic reversal Wednesday, led by a 12% surge in the Nasdaq and strong gains across major indices, following President Trump’s unexpected decision to pause tariff escalation for non-retaliating trade partners.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.