The USD/CAD pair is trading weaker around 1.3615 in Thursday’s early Asian session. Federal Reserve Chair Jerome Powell stated that interest rate decisions will be based on data and not political factors. The possibility of a rate cut by the Bank of Canada in July has increased due to a rise in Canada’s Unemployment Rate.
The US inflation report, including the Consumer Price Index data for June, is awaited by traders. Powell mentioned that the Fed will not wait for inflation to reach its 2% target before cutting rates. The decline in crude oil prices may impact the Canadian Dollar negatively as Canada is a major oil exporter to the US.
ING analyst Francesco Pesole highlighted that the rise in Canada’s Unemployment Rate has raised the possibility of a rate cut by the Bank of Canada in July. The financial markets have priced in a 16 basis points easing for July. Factors influencing the Canadian Dollar include interest rates set by the Bank of Canada, oil prices, the country’s economy, inflation, and trade balance.