- USD/CAD consolidates near 1.3750 with a focus on the US Retail Sales report for May.
- Investors see the Fed reducing interest rates twice this year against one forecasted by policymakers.
- The BoC may extend its policy-tightening spell in July.
The USD/CAD pair is slightly up in Monday’s London session but has been trading in a range of 1.3710-1.3780 from Thursday. The Loonie asset struggles to find direction as investors shift focus to the monthly United States (US) Retail Sales data for May, which will be published on Tuesday.
Investors will pay close attention to the US Retail Sales data for fresh cues on the Federal Reserve’s (Fed) policy outlook. The Retail Sales data is a close measure of consumer spending, which provides cues on the inflation outlook. This would give more clarity on the divergence between the Fed’s expectations of one rate cut this year and the two that financial markets are speculating about. Retail Sales are estimated to have expanded by 0.3% after remaining flat in April.
According to the CME FedWatch tool, the possibility of two rate cuts this year is very high and policymakers will start reducing from the September meeting.
Meanwhile, Fed officials continue to argue in favor of cutting interest rates only once this year as they want to see inflation declining for months to gain confidence in lowering interest rates. Fed policymakers remain concerned over reacceleration in price pressures due to premature rate cuts.
On the Canadian Dollar front, investors expect that the Bank of Canada (BoC) will deliver subsequent rate cuts in the July meeting. The BoC became the first among central banks of G-7 nations to start unwinding its restrictive monetary policy framework since the pandemic.
(This story was corrected on June 17 at 12:30 GMT to say that the USD/CAD has been trading in a range of 1.3710-1.3780 from Thursday, not in a range of 1.710-1.3780)
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
Gold hovers around all-time highs near $3,250
Gold is holding steady near the $3,250 mark, fuelled by robust safe-haven demand, trade war concerns, and a softer-than-expected US inflation gauge. The US Dollar keeps trading with heavy losses around three-year lows.
EUR/USD retreats towards 1.1300 as Wall Street shrugs off trade war headlines
The EUR/USD pair retreated further from its recent multi-month peak at 1.1473 and trades around the 1.1300 mark. Wall Street manages to advance ahead of the weekly close, despite escalating tensions between Washington and Beijing and mounting fears of a US recession. Profit-taking ahead of the close also weighs on the pair.
GBP/USD trims gains, recedes to the 1.3050 zone
GBP/USD now gives away part of the earlier advance to fresh highs near 1.3150. Meanwhile, the US Dollar remains offered amid escalating China-US trade tensions, recession fears in the US, and softer-than-expected US Producer Price data.
Bitcoin, Ethereum, Dogecoin and Cardano stabilze – Why crypto is in limbo
Bitcoin, Ethereum, Dogecoin and Cardano stabilize on Friday as crypto market capitalization steadies around $2.69 trillion. Crypto traders are recovering from the swing in token prices and the Monday bloodbath.
Is a recession looming?
Wall Street skyrockets after Trump announces tariff delay. But gains remain limited as Trade War with China continues. Recession odds have eased, but investors remain fearful. The worst may not be over, deeper market wounds still possible.
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.