USD/CAD flat-lines around 1.3420, investors await the US CPI

• USD/CAD moves sideways near the 1.3420 mark in the early Asian session.
• US President Joe Biden issued an executive order about the restriction on China.
• The Canadian Building Permits came in at 6.1% MoM in July, better than market expectation of 3.5%.
• Investors will monitor the US Consumer Price Index (CPI) for July, due later in the American session.

The USD/CAD pair struggles to gain any meaningful traction during the early Asian session on Thursday. The major pair currently trades near 1.3421, up 0.01% for the day. Market participants prefer to wait on the sidelines ahead of the US top-tier data release. Meanwhile, the US Dollar Index (DXY) trades sideways near 102.50 amid the cautious mood in the market.

On Wednesday, US President Joe Biden issued an executive order about the restriction on China. That said, the US intends to target only Chinese companies that generate more than 50% of their revenue from quantum computation and artificial intelligence (AI).

China's Commerce Ministry expressed severe worries in response to the US executive order restricting some investments in Chinese technology businesses, according to Reuters. The Chinese authorities added that they hope the US will respect market economic laws and the principle of fair competition. Market players will keep an eye on the developments surrounding the world’s two largest economies.

Furthermore, money market futures do not anticipate higher borrowing rates. According to the CME FedWatch Tool, the markets anticipate an 86.0% chance that the Federal Reserve will pause interest rate hikes at its meeting in September. This, in turn, might cap the upside in the US Dollar and acts as a headwind for the USD/CAD pair

On the other hand, Canadian Building Permits came in at 6.1% MoM in July, better than market expectations of a 3.5% drop. Meanwhile, the uptick in oil prices has supported the Loonie. That said, WTI prices hit a new yearly high on Wednesday, above $84.00. Higher crude prices strengthen the Canadian Dollar, as the country is the leading oil exporter to the United States.

Looking ahead, investors will keep an eye on the US inflation data due later this week. The US Consumer Price Index (CPI) for July will be released on Thursday in the American session. The inflation figure is expected to rise from 3% to 3.3%, and the core inflation figure is expected to stay at 4.8%. Also, the Producer Price Index (PPI) will be due on Friday. The data will be critical for determining a clear movement for the USD/CAD pair.