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The USD/CAD pair witnessed a bearish trend in the past week, primarily driven by weakness in the US dollar. Economic indicators from the US highlighted a slowdown in the economy, exerting downward pressure on the greenback. Here’s a closer look at the developments influencing the USD/CAD pair:
Economic Reports Signal US Slowdown
Throughout the week, several economic reports from the US indicated a deceleration in economic growth. Of particular concern was the decline in business activity observed in April, reflecting the impact of higher interest rates on economic performance.
US GDP Growth Below Expectations
The US economy expanded at a lower-than-expected rate of 1.6% in the first quarter, signaling challenges to sustained growth momentum. While this moderated growth provided some respite for the Federal Reserve, concerns persisted regarding persistently high inflation levels.
Focus on FOMC Meeting and US Jobs Report
Investor attention is now directed towards the upcoming Federal Open Market Committee (FOMC) meeting and the release of the US jobs report. These events are expected to provide further insights into the state of the US economy and the Federal Reserve’s policy stance in response to prevailing economic conditions.
Subtle Bearish Trend in USD/CAD Forecast
Against this backdrop, a subtle bearish trend emerges in the USD/CAD weekly forecast as the US dollar cedes ground amidst the slowdown in economic activity. Uncertainty surrounding the economic outlook, coupled with lingering inflationary pressures, weighs on investor sentiment and contributes to the weakening of the dollar against the Canadian counterpart.
In summary, the USD/CAD pair faces downward pressure as the US economy grapples with growth challenges and inflationary concerns. Market participants await key data releases and the outcome of the FOMC meeting for further guidance on the trajectory of the currency pair.
