USD/CAD Holds Modest Gains Near 1.3800 as Traders Await US PCE Inflation Data

USD/CAD Keeps Modest Intraday Gains Around 1.3800 Ahead of US PCE Data

The USD/CAD pair holds onto modest intraday gains near the 1.3800 level during Friday’s European session. The US Dollar (USD) finds some dip-buying support after a sharp reversal on Thursday, while weaker crude oil prices weigh on the commodity-sensitive Canadian Dollar (CAD), also known as the Loonie.

Traders remain cautious and hold off placing new directional bets ahead of the upcoming US Personal Consumption Expenditure (PCE) Price Index release, which is a crucial indicator for inflation and the Federal Reserve’s monetary policy outlook.

Despite the recent USD strength, concerns over the US fiscal outlook and expectations of Fed rate cuts later this year limit further USD gains. Meanwhile, reduced chances of a Bank of Canada (BoC) rate cut in June provide some support to the CAD, capping USD/CAD’s upside potential.

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