Ella 
USD/CAD broke a six-day losing streak in Asia on Monday, trading around 1.3700. Stronger-than-expected U.S. Purchasing Managers Index data released last Friday boosted the dollar and boosted USD/CAD.
The U.S. composite purchasing managers index for June exceeded expectations, rising to 54.6 from 54.5 in May. The indicator hit its highest level since April 2022. The manufacturing purchasing managers index rose to 51.7 from 51.3 in the previous month, exceeding the expected 51.0. Similarly, the services purchasing managers index rose to 55.1 from 54.8 in May, stronger than the expected value of 53.7.
The U.S. dollar index (DXY), which measures the value of the U.S. dollar against six major currencies, rose as Federal Reserve officials delayed the expected timing of the first interest rate cut this year. Neel Kashkari, president of the Minneapolis Federal Reserve Bank, said on Thursday that it could take a year or two for inflation to return to 2%, according to Reuters.
The Chicago Mercantile Exchange’s FedWatch tool shows that investors are pricing in a probability of a Fed rate cut in September of nearly 65.9%, compared with 70.2% a week ago.
For the Canadian dollar, the upward consolidation of crude oil prices may limit the downside of the commodity-linked Canadian dollar. Geopolitical tensions are supporting oil prices, with Israeli troops advancing deep into Gaza in the Middle East, while Ukrainian drone attacks on Russian refineries continue to disrupt crude oil supplies.
