USD/CAD keeps the red below 1.3500 after Canadian Retail Sales, focus remains on Fed’s Powell – Crypto News – Crypto News
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USD/CAD keeps the red below 1.3500 after Canadian Retail Sales, focus remains on Fed’s Powell – Crypto News

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  • USD/CAD meets with a fresh supply on Friday and is weighed down by a combination of factors.
  • Rising Crude Oil prices underpin the Loonie and exert some pressure amid a modest USD downtick.
  • The pair reacts little to the Canadian macro data as the focus remains on Fed Chair Powell’s speech.

The USD/CAD pair continues with its struggle to make it through the 100-day Simple Moving Average (SMA) and attracts fresh selling on the last day of the week. Spot prices trade near the lower end of the daily range, around the 1.3480-1.3475 area, down just over 0.15% during the early North American session and move slightly following the release of the Canadian macro data.

Statistics Canada reported that Retail Sales declined by 1.4% MoM in March, matching consensus estimates and well below the 0.2% decline recorded in the previous month. Retail Sales ex-Autos, however, dropped less than expected, by 0.4% in the same previous as compared to the 0.7% fall in February. This, along with a goodish pickup in Crude oil pricescontinues to underpin the commodity-linked Loonie and exerts some downward pressure on the USD/CAD pair amid a modest US Dollar (USD) weakness.

In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, pulls back from a nearly two-month high touched the previous day and is pressured by a positive risk tone. The latest optimism over the potential of lifting the US debt ceiling helps ease fears about an unprecedented default by the world’s largest economy and boosts investors’ confidence. This is evident from a further rise in the equity markets, which tends to drive flows away from the perceived safe-haven assets, including the buck.

That said, the recent hawkish comments by several Federal Reserve (Fed) officials, which forced investors to scale back their bets for interest rate cuts later this year, should limit the downside for the USD. In fact, the current market pricing indicates a small chance of another 25 bps lift-off at the next FOMC meeting in June. Hence, market participants will take cues from Fed Chair Jerome Powell’s speech for fresh clues about the future rate-hike path, which should drive the USD and provide a fresh impetus to the USD/CAD pair.

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