During Wednesday’s Asian trading hours, the USD/CAD remained below the 1.3200 level. Despite this, Canadian economic data reflected a slowdown, particularly in the monthly Gross Domestic Product (GDP). In October, the GDP showed no growth, staying flat at 0.0%, following a downward revision of September’s GDP from 0.1% to flat.

Conversely, the US Dollar (USD) faced downward pressure as speculation grew regarding potential easing by the US Federal Reserve (Fed). This pressure limited the USD/CAD pair’s upward movement. The prevailing sentiment of weakening was further accentuated by the decrease in US Treasury yields, contributing to the factors undermining the strength of the US Dollar.

Former Dallas Federal Reserve President Robert Kaplan shared insights with the media on Tuesday, emphasizing the Fed’s past error of maintaining prolonged excessive accommodation despite positive economic indicators. He expressed the belief that the central bank is now exercising caution to avoid repeating this mistake, being mindful not to become overly restrictive and potentially hinder economic growth.

Additionally, the US Bureau of Economic Analysis (BEA) reported softer Core Personal Consumption Expenditures (PCE) – Index for November, adding to the pressure on the US Dollar. US Core PCE Inflation (YoY) grew at 3.2%, falling short of the expected 3.3% and the previous 3.4%. Meanwhile, the month-over-month data showed consistency at 0.1%, below the market expectation of 0.2%.

Looking ahead to Thursday, the release of Initial Jobless Claims and Pending Home Sales data from the United States (US) is anticipated. Meanwhile, there are no scheduled data releases on the Canadian economic docket for the week.