USD/CAD rises above 1.3700 ahead of Core PCE inflation
The USD/CAD pair continues its winning streak, driven by higher yields on US Treasury bonds. The US Core PCE inflation is expected to decrease to 2.6% YoY from the previous 2.8%, while Canada’s GDP (MoM) is forecasted to grow by 0.3% in April, following neutral growth in March.
USD/CAD is trading around 1.3710 during the European session on Friday, with investors awaiting the Core PCE Price Index inflation data. The US Dollar is supported by higher yields on US Treasury bonds, leading to gains in the USD/CAD pair. The US Dollar Index (DXY) remains above 106.00, with US yields standing at 4.72% and 4.29%, respectively.
Federal Reserve Board of Governors member Michelle Bowman stated that she does not support a central bank rate cut yet, citing elevated inflation pressures. On the Canadian Dollar front, Statistics Canada is set to release the country’s GDP (MoM) data, with expectations of 0.3% growth in April.
Higher crude oil prices are limiting the downside of the commodity-linked CAD, as Canada is the largest oil exporter to the US. West Texas Intermediate (WTI) crude oil price is trading near $81.90, extending gains for the third straight day. Crude oil prices are set to advance due to supply threats in the Middle East.
Overall, the USD/CAD pair is influenced by various economic indicators and market dynamics, with both the US Dollar and Canadian Dollar facing different factors affecting their performance.