USD/CAD depreciates to near 1.3650 ahead of Canada’s CPI

• USD/CAD extends its losing streak ahead of Canada’s inflation data release on Tuesday.
• Lower WTI price may limit the upside of the commodity-linked Canadian Dollar.
• Fed’s Austan Goolsbee said that the Fed might need to consider the impact of restrictive policy on the US economy.

USD/CAD continues its losing streak that began on June 14, trading around 1.3650 during the European session on Tuesday. Statistics Canada is set to release the top-tier Consumer Price Index (CPI) data for May later in the North American session.

Also read: Canada CPI Preview: Inflation expected to continue easing in May

The downward correction in the crude Oil prices put pressure on the commodity-linked Canadian Dollar (CAD) as Canada is the largest crude Oil exporter to the United States (US). West Texas Intermediate (WTI), the US crude Oil benchmark, trades around $81.40, at the time of writing. However, Crude prices may limit its downside on the hope for a strong summer driving demand and Oil supply concerns amid the ongoing geopolitical tensions in the Middle East.

The US Dollar (USD) received downward pressure from dovish comments from Chicago Fed President Austan Goolsbee, which in turn undermines the USD/CAD pair. On Monday, Goolsbee said in a chat show on CNBC’s Squawk Box that the Federal Reserve might need to consider whether the restrictive policy is putting too much pressure on the economy.

US Dollar Index (DXY), which measures the value of the US Dollar against six other major currencies, remains softer ahead of the revised US Gross Domestic Product (GDP) for the first quarter (Q1) is set to be released on Thursday, followed by the Personal Consumption Expenditure (PCE) Price Index on Friday.