Canadian Dollar strengthens above 1.3650 ahead of Canada's GDP, US PPI data

The USD/CAD pair trades with mild losses near 1.3675 during the Asian trading hours on Friday. US policy fog continues to weigh on the US Dollar (USD) against the Canadian Dollar (CAD). Traders brace for the Canadian Q4 Gross Domestic Product (GDP) and US January Producer Price Index (PPI) reports, which are due later on Friday. 

The Greenback remains on the defensive following the US Supreme Court's ruling last week that the emergency powers law used by US President Donald Trump to impose tariffs did not authorize his policy regime. Trump said that he would impose a blanket 15% tariff on imports, using legislation that allows him to impose import taxes for 150 days without congressional approval. The next day, Trump threatened to raise levies to 15%, raising concerns over US tariff uncertainty. 

Nonetheless, better-than-expected US Initial Jobless Claims data might help limit the USD’s losses. Data released by the US Department of Labor (DOL) on Thursday showed that the number of Americans filing first-time unemployment claims rose to 212K in the week ending February 21. This figure followed 208K (revised from 206K) recorded in the previous week and came in below the market consensus of 215K. 

Meanwhile, easing tensions between the US and Iran could undermine the commodity-linked Loonie. It is worth noting that Canada is a major oil-exporting country, and lower crude oil prices generally have a negative impact on the CAD. Oman’s Foreign Minister Badr Albusaidi said on Thursday that the US and Iran will continue nuclear talks next week after making “significant progress” in Switzerland.