USD/CAD Bulls Remain In Place With An Eye on $1.3520

USD/CAD is flat in the Toyo opening hour on Friday, during which the pair rallied from 1.3375 to 1.3495. As a result, CAD was experiencing its largest decline since early March, as oil prices fell and US economic data provided further evidence of the economy's slowdown.

The number of Americans filing new claims for unemployment benefits surged to a 1-1/2-year high last week, and producer prices rebounded modestly in April. U.S. weekly initial unemployment claims rose +22,000 to 264,000, showing a weaker labor market than expectations of 245,000.

Crude oil and gasoline prices posted moderate declines on Thursday as a result of additional market developments.Canada sends about 75% of its exports to the United States, including oil. Thursday's weaker-than-expected economic news from China and the United States, the world's two largest crude consumers, sparked fears of a slowdown in the global economy, which is bearish for energy demand. These fears weighed on crude oil prices.

´´The OPEC put, along with an expected resurgence in Chinese demand later this year, should maintain oil prices on a firming trajectory. ''At the same time, CTA positioning remains near maximum short levels, suggesting that this group will not contribute significantly to the additional downside,'' TD Securities analysts stated.

In the meantime, the US inflation outlook has improved, resulting in a decline in Treasury yields on two-year notes, which can move in tandem with interest rate expectations, to 3.90 percent from over 4 percent at the end of last week. The yield on 10-year notes declined 5 basis points to 3.386%.

As a result, the likelihood that the Fed will raise rates again in June has increased to 10.7% on the futures markets, up from 2.1% shortly after the release of the data. The likelihood that the Federal Reserve will reduce interest rates later this year has also increased.