The USD/CAD Pair Trades Weaker above the 1.3500 Level Ahead of Canadian Retail Sales Data

Friday morning, during early Asian trading hours, the USD/CAD pair trades on a weaker note above the 1.3500 level. The pair is impacted by the US Dollar's (USD) decline below the 104.00 mark. As of press time, the USD/CAD exchange rate is 1.3523, representing a daily loss of 0.05%.

At its March meeting on Wednesday, the Federal Reserve (Fed) maintained its stance on interest rates and upheld its projection of three reductions in interest rates for the current year. Fed Chair Jerome Powell stated at a press conference that a robust labor market would not dissuade the central bank from implementing rate reductions.

The US S&P Global Manufacturing PMI rose to 52.5 in March from 52.2 in February, exceeding expectations of 51.7, the report said on Thursday. In March, the Services PMI decelerated to 51.7 from 52.3, which was lower than the market and consensus estimate of 52.0. In March, the Composite PMI finally reached 52.2, up from 52.5 previously.  

Concerning the Loonie, the March Summary of Deliberations from the Bank of Canada (BoC) meeting revealed that the governing council agreed that "conditions for rate cuts should materialize throughout the course of this year if the economy continues to evolve in accordance with the Bank's projections." The timing of rate reduction, however, remains uncertain. Governor Tiff Macklem of the Bank of Canada stated that the central bank did not wish to act too swiftly, only to later have to reverse its decision.

On Friday, Canadian Retail Sales for January are anticipated to report a 0.4% month-over-month decline. On Friday, Fed Chair Jerome Powell and Michael Barr are scheduled to deliver speeches.