USD/CAD remains sideways above 1.3500 as investors eye Jackson Hole event

• USD/CAD continues to trade lackluster above 1.3500 ahead of Jackson Hole.
• The appeal for the US Dollar eases as investors digested the bleak economic prospects of China.
• Jerome Powell is likely to comment about keeping rates higher for a decent period to ensure inflation returns to 2%.

The USD/CAD pair trades lackluster above 1.3500 as investors have sidelined ahead of the Jackson Hole Economic Symposium, which will start on Thursday. The Loonie asset struggles to find a direction as investors remain mixed about Federal Reserve (Fed) chair Jerome Powell’s commentary at Jackson Hole.

S&P500 futures add decent gains in the London session. US equities were decently bought on Monday, portraying further improvement in the risk appetite of the market participants. Risk-sensitive assets strengthened on Tuesday as the appeal for US Dollar fades. The appeal for the US Dollar eases as investors digested the bleak economic prospects of China.

On Monday, the People’s Bank of China (PBoC) lowered its one-year Prime Lending Rate (PLR) by 10 basis points (bps) to 3.45%. The PBoC delivered a dovish interest rate decision to tackle significant deflation risks and underpin economic demand.

The US Dollar Index (DXY) continues to trade lackluster as the upside seems restricted around 103.50. The upside in the USD Index gets restricted as Fed Powell is expected to raise interest rates further seldom in case of supporting economic data. Jerome Powell is likely to comment about keeping rates higher for a decent period to ensure inflation returns to 2%.

Meanwhile, the Canadian Dollar will dance to the tune of the June Retail Sales data. As per the estimates, monthly consumer spending remained stagnant against an expansion of 0.2%. Retail Sales excluding automobiles are expected to deliver a 0.3% expansion. This indicates that the demand for automobiles is declining.