USD/CAD weakens as investors await BoC’s Macklem speech

The USD/CAD pair is trading down on Friday morning in the Asian session, at 1.3560. The USD is still being hurt by predictions that the Fed may lower rates again this year. The commodity-linked Loonie is supported by rising crude oil prices.

During Friday’s early Asian session, the USD/CAD pair draws some sellers close to 1.3560, ending the two-day gain streak. As investors evaluated the likelihood of additional rate cuts by the US Federal Reserve (Fed) in the upcoming months, the value of the greenback declined. Later on Friday, Governor Tiff Macklem of the Bank of Canada (BoC) will give a speech.

With a daring 50 basis point (bps) rate drop on Wednesday, the Fed shocked the financial markets and raised its goal range to 4.75% to 5.00%. Although the action was “strong,” Fed Chair Jerome Powell said it was necessary as price increases become less pronounced and worries about the employment situation increase. In the near future, the US dollar (USD) may face extra pressure due to the dovish posture of the US Federal Reserve and the anticipated additional rate cuts this year.

In spite of a slowdown in hiring, the US weekly Initial Jobless Claims fell to the lowest level since May, according to data provided by the US Department of Labor (DoL) on Thursday. For the week ending September 14, 219K US individuals applied for unemployment insurance benefits for the first time. This number was lower than the previous week’s 231K (updated from 230K) and below the market consensus of 230K.

On the other hand, the rise in crude oil prices provides some support to the commodity-linked Canadian Dollar (CAD). It’s worth noting that Canada is the largest oil exporter to the United States (US), and higher crude oil prices tend to have a positive impact on the CAD value.