USD/CAD holds ground near the 1.3440 mark, eyes on Canadian CPI, US Retail Sales

• USD/CAD holds ground near the 1.3440 mark in the early Asian session.
• The US Producer Price Index (PPI) YoY grew by 0.8% in July from 0.1% in June. 
• The rebound in oil prices has underpinned the Loonie.
• Market players will keep an eye on the Canadian Consumer Price Index (CPI) YoY, US Retail Sales, FOMC minutes.

The USD/CAD pair trades with a mild negative bias below mid-1.3400s during the early Asian session on Monday. The Greenback extends it upside for the fourth consecutive week bolstered by mixed US economic data and the rise in US 10-year Treasury bond yields. Meanwhile, the uptick in oil prices supports the Loonie against the US Dollar. The major pair currently trades near 1.3440, down 0.02% for the day.

On Friday, the US Producer Price Index (PPI) for final demand YoY was 0.8% in July, up from 0.1% in June. The figure exceeded the market’s expectation of 0.7%. Meanwhile, the University of Michigan’s (UoM) Consumer Confidence Index for July fell to 71.2 from 71.6, better than 71 expected. Finally, UoM 5-year Consumer Inflation Expectations declined to 2.9% for August versus 3.0% estimated and prior.

The Fed San Francisco President, Mary C. Daly, stated last week that there is a lot more information to evaluate and that it is premature to project whether additional rate increases or a prolonged period of holding rates are required. Investors anticipate the Federal Reserve (Fed) will hold rates on September meeting and bets on 25 basis point (bps) rates hike in November’s policy meeting. However, the FOMC Minutes due later this week could offer hints about the Fed further monetary policy.

On the Canadian Dollar front, the rebound in oil prices has underpinned the Loonie since Canada is the largest oil exporter to the United States. About the data last week, Canadian Building Permits came in at 6.1% MoM in July, better than market expectations of a 3.5% drop. Additionally, Canada’s trade deficit widened to C$3.73 billion in June, the highest level in nearly three years. Exports fell 2.2%, and Imports fell 0.5%.

Looking ahead, market participants will keep an eye on the Canadian Consumer Price Index (CPI) YoY for July on Tuesday. The figure is expected to rise from 2.8% to 3.0% on a yearly basis. Across the pond, the US Retail Sales and FOMC minutes will be due on Tuesday and Thursday, respectively. Investors will also take cues from the Fed officials’s comments for the Jackson Hole Symposium. The data will be critical for determining a clear movement for the USD/CAD pair.