USD/CAD declines to 1.3650 as US Dollar retreats with US core PCE Inflation in focus

Source Fxstreet
May 31, 2024 09:48
  • USD/CAD falls further to 1.3650 as the US Dollar falls back ahead of the US core PCE Price Index.
  • Downwardly revised US Q1 GDP growth has kept hopes of the Fed cutting interest rates at least once this year alive.
  • The Canadian economy is forecasted to have remained stagnant in March.

The USD/CAD pair extends its downside to 1.3650 in Friday’s European session. The Loonie asset comes under pressure as the US Dollar struggles to gain ground despite uncertainty ahead of the United States core Personal Consumption Expenditure Price Index (PCE) data for April, which will be published at 12:30 GMT.

Economists expect that the core PCE inflation rose steadily by 0.3% and 2.8% on a monthly and an annual basis, respectively. Hot or expected inflation reading would weaken the case of Federal Reserve (Fed) lowering interest rates from the September meeting. The scenario would be favorable for the US Dollar and bond yields. While soft numbers will do the opposite.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is subdued around 104.75. The USD Index came under pressure after downwardly revised Q1 Gross Domestic Product (GDP) estimate boosts hopes that the Fed will reduce interest rates at least once this year. US Bureau of Economic Analysis (BEA) reported that the economy expanded at a slower pace of 1.3% due to lower consumer spendings from the preliminary estimates of 1.6%.

Meanwhile, the market sentiment is broadly risk-averse as China’s weak Manufacturing and Non-Manufacturing PMI data has raised concerns over global economic prospects. S&P 500 futures have posted some losses in the European session.

In the neighbour nation, the Canadian Dollar will dance to the tunes of the monthly and Q1 GDP data, which will be published at 12:30 GMT. The Canadian economy is projected to have remained stagnant in March after expanding 0.2% in February. Weak GDP data would boost expectations for the Bank of Canada (BoC) to begin reducing interest rates from the June meeting.

USD/CAD

Overview
Today last price 1.3653
Today Daily Change -0.0028
Today Daily Change % -0.20
Today daily open 1.3681
 
Trends
Daily SMA20 1.3667
Daily SMA50 1.366
Daily SMA100 1.3577
Daily SMA200 1.3575
 
Levels
Previous Daily High 1.3735
Previous Daily Low 1.366
Previous Weekly High 1.3744
Previous Weekly Low 1.3596
Previous Monthly High 1.3846
Previous Monthly Low 1.3478
Daily Fibonacci 38.2% 1.3689
Daily Fibonacci 61.8% 1.3706
Daily Pivot Point S1 1.3649
Daily Pivot Point S2 1.3617
Daily Pivot Point S3 1.3574
Daily Pivot Point R1 1.3724
Daily Pivot Point R2 1.3767
Daily Pivot Point R3 1.3799

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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