USD/CAD trades on a weaker note above the mid-1.3400s, US PPI data looms

The USD/CAD pair remains under selling pressure above the mid-1.3400s during the early Asian trading hours on Friday. A rise in oil prices provides some support to the commodity-linked Loonie and weighs on the pair. Investors await the US January Producer Price Index (PPI) on Friday for fresh impetus, which is projected to show an increase of 0.1% MoM and 0.6% YoY. The pair currently trades around 1.3461, losing 0.05% on the day. 

Data released from the US Census Bureau on Thursday reported that US Retail Sales fell 0.8% MoM in January from a 0.4% rise in December, weaker than the estimation of a 0.1% decline. Meanwhile, the Retail Sales Control Group arrived at -0.4% MoM versus 0.6% prior. Financial markets believe that weaker US Retail Sales might convince the Federal Reserve (Fed) to cut interest rates sooner, which weighs on the US Dollar (USD) and creates a headwind for the USD/CAD pair. 

The Canadian employment data suggests that the Bank of Canada (BoC) might push back its expectation of rate cuts to June from April. The BoC Governor Tiff Macklem has not yet been indicated about the timeline for interest rate cuts, but he said that the Canadian central bank has shifted from debating whether interest rates are high enough, to how long the central bank needs to keep rates at current levels. Meanwhile, the higher oil price continues to lift the Canadian Dollar (CAD) as Canada is the largest oil exporter to the United States.