USD/CAD consolidates its recent gains below the 1.3450 area, eyes on US PPI

• USD/CAD remains confined in a narrow band below 1.3450 on Friday.
• The US Core CPI fell to 4.7% from 4.8%, Initial Jobless claims totaled 248,000.
• Market player will monitor the US Producer Price Index (PPI), the University of Michigan (UoM) Consumer Confidence Survey.

The USD/CAD pair consolidates its recent gains in the early Asian session on Friday. The major currently trades around 1.3445, losing 0.03% for the day. Market players await the US Producer Price Index (PPI) for some hints about further monetary policy in September's Federal Reserve (Fed) meeting.

The strengthening of the US Dollar is bolstered by the odds of no additional rate hike this year and the hawkish comments from the Federal Reserve policymakers. The Fed San Francisco President, Mary C. Daly stated on Thursday that there is a lot more information to evaluate and it is premature to project whether additional rate increases or a prolonged period of holding rates are required. However, they are far from having a conversation about rate cuts. According to the CME FedWatch tool, markets are confident that the Fed won’t hike either in September or in November.

The US Bureau of Labor Statistics (BLS) reported on Thursday that the US Consumer Price Index (CPI) rose to 3.2% YoY from 3% in June. The figure was below the market consensus of 3.3%. On the same line, the Core CPI figure, which excludes volatile food and energy prices, fell to 4.7% from 4.8%. Additionally, the US Initial Jobless Claims increased to 248,000, above the expectation of 230,000.

On the other hand, 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%. Meanwhile, the downtick in oil prices weighs on the Loonie, as the country is the leading oil exporter to the United States.

Moving on, investors will keep an eye on the US Producer Price Index (PPI), due later in the day. The figure is expected to rise from 0.1% to 0.7% YoY. Also, the University of Michigan (UoM) Consumer Confidence Survey will be due in the American session. The data will be critical for determining a clear movement for the USD/CAD pair.