Investors shift away from the USD amid geopolitical risks, awaiting US PPI and jobless claims data for Fed policy clues.
The USD/CAD pair extended losses for a third day, trading near 1.3940 in Asian hours as Middle East tensions weighed on the US Dollar. Safe-haven demand initially supported the Greenback but faded as investors awaited key US economic data, including May’s Producer Price Index and Initial Jobless Claims, to gauge the Federal Reserve’s next moves.
US inflation surged in May, with the Consumer Price Index rising 4.2% year-over-year and 0.5% monthly, matching forecasts. Core CPI, excluding food and energy, climbed 0.2% monthly and 2.9% annually. The data reinforced expectations of a prolonged high-interest-rate environment, eliminating bets on Fed rate cuts this year.
The Israeli military reported launches from Lebanon toward northern Israel, heightening geopolitical risks. While the conflict could drive energy prices higher, traders remain focused on upcoming US data releases for further direction.