• USD/CAD edges lower as crude Oil prices are set to end the week higher.
• The US Dollar remains weaker ahead of the Michigan Consumer Sentiment Index release for August.
• Traders fully price in a 25 basis point rate cut at the Fed’s next meeting in September.

USD/CAD halts its two days of gains, trading around 1.3720 during the Asian hours on Friday. The Canadian Dollar (CAD) receives support from the improved risk-on mood following the stronger-than-expected recovery in US Retail Sales, which has eased concerns about a potential recession in the United States (US).

The commodity-linked CAD may continue to advance, as crude Oil prices are poised to end the week higher. This increase comes on the heels of recent US economic data that boosted optimism over demand in the world’s top Oil-consuming nation. Given the fact that Canada is the largest crude exporter to the US. At the time of writing, the price of West Texas Intermediate (WTI) oil is trading near $76.60 per barrel.

In the United States, traders await the preliminary US Michigan Consumer Sentiment Index for August and Building Permits for July to be released later in the North American session on Friday.

The US Dollar (USD) depreciates as traders fully price in a 25 basis point rate reduction by the US Federal Reserve for September. However, a 50 basis point cut remains a possibility, with the CME FedWatch tool indicating a 26% chance of such a move.