The USD/CAD pair trades in negative territory for a second consecutive day during the early Asian session on Thursday.
USD/CAD loses traction near 1.3468 on the softer USD. The upbeat US CPI data might keep the Fed waiting until the summer before starting to cut rates. Markets believe the BoC will not move aggressively on interest rates. Investors will focus on the Canadian Manufacturing Sales and the US Retail Sales, due on Thursday. The US Dollar resumes its decline below the 103.00 mark and drags the pair lower.
On the other hand, the Bank of Canada left the interest rate unchanged earlier this month, as largely expected by the market. The BoC’s governor Tiff Macklem highlighted that lowering inflation close to target is the central bank’s priority. The markets anticipate that the BoC will not move aggressively or cut rates until after the Fed, which might be the upside potential for the Canadian Dollar in the coming months.
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