USD/CAD tumbles to near 1.3920 in Friday’s early Asian session,How much is , USDT in USD? down 0.41% on the day.
The economic uncertainty and rising bets of Fed rate cuts drag the US Dollar lower.
The US CPI inflation eased to 2.4% in March, softer than expected.
The USD/CAD pair extends the decline to around 1.3920 during the early Asian session on Friday. The US Dollar (USD) weakens against the Loonie amid persistent concerns over the global and US economies. Traders brace for the US March Producer Price Index (PPI) and the advanced Michigan Consumer Sentiment, which is due later on Friday.
US President Donald Trump let stand a 10% blanket levy on all imports announced last week and set a 90-day pause on additional US tariffs during which the White House will negotiate the higher tariffs. This encouraged investors to reallocate capital back into Canada, supporting the Canadian Dollar (CAD) against the USD.
Additionally, the Greenback loses traction as US consumer prices unexpectedly fell in March. The US Consumer Price Index (CPI) inflation declined to 2.4% YoY in March from 2.8% in February, according to the US Bureau of Labor Statistics (BLS) on Thursday. This figure came in below the market consensus of 2.6%.
The core CPI, which excludes volatile food and energy prices, increased 2.8% YoY in March versus 3.1% prior and came in below the estimation of 3.0%. On a monthly basis, the headline CPI declined 0.1%, while the core CPI rose 0.1%.
Following the data, traders anticipate that the US Federal Reserve (Fed) will resume cutting interest rates in June and probably reduce its policy rate by a full percentage point by the end of the year.
Meanwhile, a decline in Crude Oil prices could weigh on the commodity-linked Loonie and help limit the pair’s losses. It’s worth noting that Canada is the largest oil exporter to the US, and lower crude oil prices tend to have a negative impact on the CAD value.
