Ella 
USD/CAD bears returned after reversing from three-month highs the previous day, but struggled to maintain their upper hand. Despite this, the exchange rate hovered around 1.3520 during the European morning on Thursday.
The pair showed caution in the market ahead of a slew of U.S. data and the start of the two-day annual Jackson Hole symposium. In addition, precarious oil prices and a weak dollar are also challenges for USD/CAD traders in the near term.
The U.S. dollar index (DXY) was still hovering around 103.40 after reversing from an 11-week high the previous day, while WTI crude oil, Canada’s main export product, was slightly lower near $78.40, while shedding a one-month low set on Wednesday points of rebound momentum.
It is worth noting that the weekly inventory data released by the US Energy Information Administration (EIA) showed a sharp decrease in oil inventories. Yuan traders are troubled.
Likewise, statistics from the U.S. were mostly weak, but Canadian data was unimpressive, which in turn spoiled the outlook for the USD/CAD pair, although fears of higher interest rates have eased recently. The bear market of the previous day still appeared.
On Wednesday, the initial value of the S&P Global Manufacturing Purchasing Managers Index for August in the United States fell to 47.0 from 49.0, while the market forecast was 49.3; the initial value of the service sector Purchasing Managers Index also fell to 51.0, compared with the expected 52.2, compared with 52.3 in the previous month. The S&P Global Composite PMI also fell to 50.4 this month from 52.0 the previous month and analysts’ expectations for 50.4. In addition, the month-on-month change in U.S. new home sales rose to 4.4% in July from -2.5% in the previous month.
Domestically, Canada’s June retail sales were revised up 0.1% MoM, compared to a consensus of 0.0% MoM; ex-auto retail sales fell from -0.3% MoM previously (revised) and 0.3% forecast by consensus to -0.8%.
While portraying market sentiment, S&P 500 futures were up half a percent at press time to 4,470 after posting their biggest gain in a month the previous day. Elsewhere, U.S. 10-year Treasury yields traded around 4.20%, snapping a two-day losing streak from levels not seen since 2007 after posting their biggest one-day drop in three weeks.
U.S. Durable Goods Orders, Chicago Fed National Activity Index, Kansas City Fed Manufacturing Activity and Weekly Jobless Claims will be the data to watch. On top of that, Fed Chairman Jerome Powell’s defense of hawkish monetary policy will be key to watch for its clear direction, as the latest U.S. data suggests the end of the rate hike cycle is near, which could, if confirmed, Will weigh on the dollar and favor ruble currency pair sellers.
