USD/CAD moves below 1.3700 due to risk-on mood, US GDP awaited
- USD/CAD loses ground due to improving risk appetite.
- The US Dollar depreciates following the subdued US Treasury yields.
- The lower Canadian Retail Sales figures have fueled speculation that the BoC might opt to reduce interest rates in June.
USD/CAD pares its recent gains registered in the previous session, trading around 1.3670 during the European hours on Thursday. The improving risk appetite weakens the US Dollar (USD), undermining the USD/CAD pair.
The US Dollar Index (DXY), which measures the US Dollar (USD) against six major currencies, edging lower to near 105.60, down by 0.23%, by the press time on Thursday. The decline in the US Treasury yields, following mixed manufacturing data from the United States (US), put pressure on the Greenback.
According to the US Department of Commerce's report on Wednesday, US Durable Goods Orders surged by 2.6% month-over-month (MoM) in March, surpassing the previous reading of 0.7% and beating the estimated 2.5%. This marked the largest monthly increase in durable goods orders since last November, driven primarily by strong demand for transport equipment. Meanwhile, core goods, excluding transportation, only increased by 0.2% MoM, falling short of the expected 0.3%.
On Thursday, the preliminary Gross Domestic Product Annualized (Q1) data for the United States (US) is scheduled to be released, with expectations of a slowdown in the growth rate. These GDP figures will provide insights into the strength of the US economy and could potentially influence future actions by the Federal Reserve (Fed).
The Canadian Dollar (CAD) struggled after lower-than-expected Retail Sales data was released on Wednesday. This has sparked speculation that the Bank of Canada (BoC) may consider cutting interest rates at its next meeting in June. This sentiment may weigh on the Loonie Dollar (CAD).