USD/CAD looks weak above 1.3140 as USD Index refreshes day’s low
- USD/CAD is looking vulnerable above 1.3140 amid a risk-off mood.
- The USD Index has refreshed its day’s low at 102.64 as investors have digested consequences of higher interest rates by the Fed.
- Canada’s annualized inflation is seen softening to 3.4% vs. the former release of 4.4%.
The USD/CAD pair is struggling in maintaining its auction above the immediate support of 1.3140 in the European session. The Loonie asset is expected to deliver more downside as the US Dollar Index (DXY) has refreshed its day’s low at 102.64.
S&P500 futures are holding losses as investors turn cautious among investors ahead of the quarterly result season. The US Dollar Index is facing pressure as investors have started shrugging off risks associated with chances of more interest rate hikes from the Federal Reserve (Fed).
The US Dollar Index has delivered a breakdown of the consolidation formed in a range of below 102.80. Also, the US Treasury yields have faced immense pressure. The yields offered on 10-year US government bonds have dropped to near 3.69%.
Going forward, investors will keep the focus on the United States Durables Goods Orders data (May). As per the consensus, the economic data is seen contracting by 1.0% vs. an expansion of 1.1%. Durable Goods Orders excluding defense are seen as stagnant against a contraction of 0.7%. Scrutiny of the forward economic data indicates that fewer defense orders impacted the economic indicator.
Meanwhile, the Canadian Dollar is showing resilience ahead of the Consumer Price Index (CPI) data (May). As per the consensus, monthly inflation showed a pace of 0.5% vs. a velocity of 0.7%. Annualized inflation is seen softening to 3.4% vs. the former release of 4.4%. And, core inflation is expected to decelerate to 3.7% against the former release of 4.1%.
The release of the expected inflation report would provide luxury to the Bank of Canada (BoC) for keeping monetary policy steady.