The USD/CAD pair is experiencing a decline, approaching the 1.3850 level, influenced by a weakening US Dollar. Investor apprehension regarding a potential US recession and sustained inflationary pressures are contributing to a reallocation of assets away from the United States. Further downward pressure on the USD stems from escalating trade disputes between the US and China, heightening concerns about global economic deceleration. Recent tariff increases imposed by both nations have intensified these anxieties. Concurrently, subdued crude oil prices may present challenges for the commodity-linked Canadian Dollar. Recent economic indicators, including a decline in the University of Michigan’s consumer sentiment index and elevated one-year inflation expectations, have further contributed to market caution. While the US Producer Price Index exhibited a moderate increase, and initial jobless claims saw a slight rise, the overall economic outlook remains uncertain.
