Traders await US Q2 GDP and PCE inflation figures to gauge the Federal Reserve’s next policy move amid mixed signals on rates.
The USD/CAD pair consolidates below the 1.4100 level in early Asian trading, remaining near a one-week low reached Wednesday. Market caution persists ahead of key US economic data, including the Advance Q2 GDP report and the Personal Consumption Expenditures Price Index, which may influence Fed policy expectations.
Recent Fed communications left rates unchanged, though three policymakers voted for a 25 basis points hike, citing persistent inflation above the 2% target. Oil price volatility and escalating US-Iran tensions have also supported the USD as a safe-haven asset, offsetting some of the dollar’s post-FOMC losses.
Traders are balancing mixed signals, with focus shifting to Thursday’s data releases for clearer direction on the Fed’s rate path and potential impact on the USD/CAD pair.