Ella 
USD/CAD rose modestly to around 1.3710 in early Asian trading Thursday, ending a four-day losing streak. The market is betting less on the Federal Reserve to cut interest rates this year, and the dollar’s small rebound may be resisted.
US retail sales data for May fell short of expectations, boosting expectations of a rate cut by the Federal Reserve this year, dragging the dollar and Treasury yields lower. Fed officials have maintained their data-dependent approach. John Williams, president of the Federal Reserve Bank of New York, said on Tuesday that interest rates will gradually fall over time as inflation retreats, but he declined to say when the Fed will start easing monetary policy. Meanwhile, Boston Fed President Susan Collins said it was too early to tell whether inflation is moving toward the target.
Traders will get more clues from the weekly US initial jobless claims, building permits, housing starts, the Philadelphia Fed manufacturing index and a speech by Fed Chairman Barkin, which will be released later on Thursday. US initial jobless claims are expected to fall to 235,000 from 242,000 last week. Better-than-expected U.S. economic data could boost the dollar and limit NZD/USD’s downside.
The Bank of Canada (BoC)’s latest review summary released on Wednesday said that Canadian policymakers are concerned about downside risks and the possibility of a widening divergence between Canada and the United States. The Bank of Canada decided to cut its policy rate from 5% to 4.75% on June 5, the first rate cut in four years. Investors believe there will be at least two more rate cuts before the end of 2023, and see a nearly 60% chance of a 25 basis point cut at the July meeting, according to Refinitiv data.
