During Thursday’s European trading hours, the USD/CAD pair retraced its recent gains, hovering around the 1.3670 level. The uptick in risk appetite has exerted pressure on the US Dollar (USD), consequently undermining the USD/CAD pair.
The US Dollar Index (DXY), gauging the USD against a basket of six major currencies, experienced a marginal decline, nearing 105.60, marking a 0.23% decrease at the time of reporting on Thursday. The dip in US Treasury yields, following a mixed bag of manufacturing data from the United States (US), has contributed to the Greenback’s weakness.
Recent data from the US Department of Commerce revealed a robust surge in Durable Goods Orders, indicating a 2.6% month-over-month (MoM) increase in March. This surpasses the previous reading of 0.7% and outpaces the estimated 2.5%, marking the most significant monthly upturn since November, largely driven by robust demand for transportation equipment. However, core goods, excluding transportation, saw a more modest increase of 0.2% MoM, falling short of the anticipated 0.3%.
Looking ahead, market participants await the release of preliminary Gross Domestic Product Annualized (Q1) data for the United States (US). Expectations suggest a potential deceleration in the growth rate, which will offer valuable insights into the resilience of the US economy and could shape future policy decisions by the Federal Reserve (Fed).
Meanwhile, the Canadian Dollar (CAD) faced headwinds following the release of lower-than-expected Retail Sales data on Wednesday. This development has fueled speculation that the Bank of Canada (BoC) might contemplate interest rate cuts at its forthcoming meeting in June, a sentiment that could weigh further on the Loonie Dollar (CAD).
