During the initial hours of Thursday’s European trading session, the USD/CAD pair exhibits a slight rebound, hovering near the 1.3615 level. The modest resurgence of the US Dollar (USD) offers some support to the pair amidst market activities.
Investor focus remains attuned to a slew of economic indicators scheduled for release later in the day. Notable among these are US Building Permits, Housing Starts, the weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, and Industrial Production, which are anticipated to influence market sentiment.
Federal Reserve Bank of Minneapolis President Neel Kashkari emphasized the need for vigilant monitoring of the economy to assess the appropriateness of prevailing policy rates. This follows earlier remarks by Fed Chair Jerome Powell, who hinted at the possibility of prolonged interest rate hikes to combat inflation. However, softer US inflation data reported on Wednesday has sparked speculation of potential rate cuts by the Fed, consequently bolstering the Greenback.
In April, the US Consumer Price Index (CPI) registered a 3.4% year-on-year increase, slightly lower than the previous reading of 3.5%. Core CPI, excluding volatile items, rose by 3.6% year-on-year, aligning with market expectations. However, both headline and core CPI inflation moderated to 0.3% month-on-month in April from 0.4% in March. Meanwhile, US Retail Sales stagnated at 0% month-on-month in April, falling short of the forecast of 0.4%.
On the Canadian front, Statistics Canada reported a disappointing 2.1% month-on-month decline in Canadian Manufacturing Sales for March, contrasting with the previous month’s 0.9% rise. Despite this, the Canadian Dollar (CAD) faces some pressure, with the rise in oil prices potentially mitigating downside risks, given Canada’s significant role as a major oil exporter to the United States.
