Cad On Backfoot Against Usd

Cad On Backfoot Against Usd by Adam Rosen last updated on May 14, 2024

Cad On Backfoot Against Usd After Us Pce Release

major setback was received by the Canadian Dollar (CAD) after the US PCE release. After the recent economic data release from the USA, the hopes of a June rate cut from the Fed have diminished once again. As a result, the USD/CAD staged a bullish rally, a sign of the CAD selling.

The US PCE was higher than expected, which is a sign of consistent inflation. As a result, cold water was poured on the rate cut expectations but some analysts from Citi still believe in a July rate cut.

Canadian Gdp Due Next Week

The next relevant economic release for the USD/CAD is the Canadian GDP due on Tuesday. However, most of the eyes will be on the Wednesday when the Federal Reserve meeting will take place. Next up is the NFP on Friday which will also shed light on the labor market and Fed's next course of action.

If the NFP report for April shows a slowdown in the economy of the USA, it will reginite hopes of a rate cut from the Federal Reserve.

If we look at the CAD performance against major currencies, it gained the most against the JPY. After that, CAD also registered gains against EUR, GBP, NZD, and CHF. The two currencies against which CAD registered losses were the USD and AUD.

In a sense, we can say that the price action of CAD was mixed on Friday as the market's focus was on bigger things. The most notable gain of CAD was against JPY, as it staged a rally of 1.39% in a single trading day.

During the day, the USD/CAD pair traded in the range of 1.3660 - 1.3700 with a mostly bearish bias. For now, the USD/CAD is sill 1.2% below the 1.3850, the swing high.

The bigger picture is that CAD is under pressure as the agenda of rate cuts from the FED has been pushed back once again!