USD/CAD oscillates in a narrow range around 1.3600

: George Solotarov; 28 August 2023; Hits: 176

USD/CAD oscillates in a narrow range around 1.3600

The USD/CAD pair oscillates in a narrow range near the round-level resistance of 1.3600 in the late European session. The Loonie asset remains sideways following the footprints of the US Dollar Index (DXY), which is struggling to find a decisive move, trading around 104.00. S&P500 futures posted some decent gains in the London session, warranting a positive opening ahead. US equities are expected to remain in action as investors fully assessed the commentary from Federal Reserve (Fed) Chair Jerome Powell at the weekend.

The US Dollar remained muted marginally above 104.00 on Monday as investors shifted their focus toward upcoming economic data for August. Fed Powell at Jackson Hole diverged the focus of investors to economic data citing that the central bank will remain data-dependent for further action. Jerome Powell commented that two months of decline in inflationary pressures is only the beginning of what we need to build confidence in the inflation path.

This week, investors will keep an eye on the labor market and ISM manufacturing PMI data for August. For further policy action, market participants want to know whether labor market conditions are cooling or still remain extremely tight. Signs of a cooling labor market would stem pressure on the US Dollar. On the Canadian Dollar front, investors are focusing on the April-June quarter Gross Domestic Product (GDP), which will be released on Friday at 12:30 GMT. As per Reuters, Q2 data is expected to show the economy grew at a slower pace of 1.1% from the 3.1% pace recorded for the January-March quarter. This would allow the Bank of Canada (BoC) to announce an unchanged interest rate decision and will keep interest rates steady at 5%.