Ella 
During early Asian trading on Thursday, the USD/CAD currency pair continued to rebound near 1.3705. Weaker-than-expected Canadian retail sales weighed on the Canadian dollar (USD). Later on Thursday, investors will pay close attention to the preliminary first-quarter annualized rate of U.S. gross domestic product (GDP), which is expected to grow by 2.5%.
Investors expect the U.S. Federal Reserve to cut the federal funds rate in September 2024, with a probability of nearly 70%, according to the CME FedWatch tool. Last week, Fed policymakers said the central bank’s current restrictive policies were appropriate and that the Fed would not cut interest rates before the end of the year. The argument for higher U.S. interest rates in the longer term has provided some support to USD/CAD.
In terms of data, data released by the U.S. Census Bureau on Wednesday showed that U.S. durable goods orders increased by 2.6% month-on-month in March, compared with the previous increase of 0.7%. Excluding transportation, durable goods orders rose 0.2% on the month, missing consensus estimates of 0.3%.
In the Canadian dollar, recent Canadian retail sales data have fueled speculation that the Bank of Canada (BOC) may cut interest rates at its next meeting in June. Canadian retail sales fell 0.1% on month in February, missing expectations for a 0.1% rise. In addition, since Canada is the largest exporter of crude oil to the United States, the decline in crude oil prices has also exerted some selling pressure on the commodity-linked Canadian dollar.
