Ella 
In early Asian trading on Friday, USD/CAD fell slightly below the 1.3500 mark. Improving risk sentiment and a slight recovery in oil prices provided some support to the Canadian dollar and weighed on USD/CAD. As of press time, USD/CAD was trading at 1.3490, down 0.03% throughout the day.
The total number of initial jobless claims in the United States was 187,000 in the week ended January 13, the lowest level since September 24, 2022. Data released by the U.S. Department of Labor on Thursday showed that this number was better than market expectations of 207,000. At the same time, the Philadelphia Fed manufacturing survey report in January was -10.6, compared with the previous value of -12.8. In response to the data, the U.S. Dollar Index moved higher above 103.60 as investors expected the Federal Reserve (FED) to be in no rush to cut interest rates.
In sharp contrast to the recent strong growth in the United States, the Canadian economy is on the verge of entering recession. Money markets expect the Federal Reserve to cut interest rates as soon as March, while the Bank of Canada (BOC) will cut interest rates for the first time starting in April. Meanwhile, a rebound in oil prices boosted the commodity-linked Canadian dollar amid worries about supply disruptions and geopolitical risks in the Middle East.
Market participants will focus on the preliminary Michigan consumer confidence index and existing home sales data released on Friday. Additionally, Fed officials Daly (San Francisco Fed) and M. Barr (Board of Governors) will speak later in the day. Traders will look for USD/CAD trading opportunities here.
