The USD/CAD pair held steady around 1.4170 during the Asian trading session on Friday, following losses in the previous day. The US Dollar (USD) weakened as disappointing jobless claims data and conflicting signals from the Federal Reserve (Fed) contributed to market uncertainty. Traders are now looking ahead to the release of the US S&P Global Purchasing Managers Index (PMI) for February, due later on Friday, for further guidance.
For the week ending February 14, US Initial Jobless Claims rose to 219,000, surpassing the anticipated 215,000, while Continuing Jobless Claims edged up to 1.869 million, slightly below the forecast of 1.87 million.
Federal Reserve Governor Adriana Kugler remarked on Thursday that US inflation has “some way to go” before reaching the 2% target, acknowledging the uncertainty ahead, according to Reuters. In contrast, St. Louis Fed President Alberto Musalem pointed to potential risks from stagflation and rising inflation expectations.
The US Dollar Index (DXY), which tracks the USD against six major currencies, hovered near 106.50 at the time of writing. However, the DXY faced some headwinds as improved market sentiment followed news from US President Donald Trump, who suggested progress in trade talks with China, alleviating some market concerns over tariffs.
Nevertheless, Trump’s announcement of planned import tariffs on lumber and forest products set to take effect next month could weigh on the Canadian Dollar (CAD), given Canada’s position as a top global producer and exporter of these goods.
Looking to Canada, traders are awaiting Friday’s Retail Sales report and a speech from Bank of Canada (BoC) Governor Tiff Macklem. These developments could provide key insights into the BoC’s stance on monetary policy, especially following January’s CPI data, which showed persistent inflationary pressures in Canada, potentially influencing future rate decisions.
Related Topics:
