USD/CAD remains on the defensive near 1.3600 ahead of US CPI data

• USD/CAD trades on a weaker note around 1.3615 in Thursday’s early Asian session. 
• Fed’s Powell said the central bank will cut rates when ready, regardless of the political calendar. 
• A rise in Canada's Unemployment Rate has prompted the BoC to consider cutting interest rates in July, ING analyst said. 

The USD/CAD pair remains under selling pressure near 1.3615 during the early Asian session on Thursday. Meanwhile, the USD Index (DXY) extends its consolidation above the 105.00 hurdle as traders await the key US inflation report. The US Consumer Price Index (CPI) data for June is due on Thursday, along with the weekly Initial Jobless Claims and speeches by the Federal Reserve’s (Fed) Raphael Bostic. 

Fed Chair Jerome Powell responded to questions before the House Financial Services Committee on Wednesday. Powell said that the central bank will make interest rate decisions based on the data, the incoming data, the evolving outlook, and the balance of risks, and not in consideration of political factors. 

He further stated that the Fed won't wait until US inflation slows to its 2% target before it cuts interest rates. The probability of the Fed leaving the policy rate unchanged in September stood at nearly 25% following this event, according to the CME FedWatch Tool. 

On the Loonie front, the decline of crude oil prices might undermine the commodity-linked Canadian Dollar (CAD) as Canada is the major crude oil exporter to the United States.

Furthermore, ING’s FX analyst Francesco Pesole said that a rise in the Canadian Unemployment rate has put a July Bank of Canada (BoC) rate cut on the table. The financial markets have priced in 16 basis points (bps)  of easing for July.