• USD/CAD weakens to around 1.3470 in Friday’s early Asian session. 
• The US August PCE data will be in the spotlight on Friday. 
• The softer US Dollar weighs on the pair, but lower crude oil prices might cap its downside. 

The USD/CAD pair edges lower to near 1.3470 during the early Asian session on Friday, pressured by the weaker US Dollar (USD) broadly. Investors await bigger clues about the economy's health after upbeat US economic data on Thursday. The US Personal Consumption Expenditures (PCE) Price Index for August will take center stage on Friday. 

With its larger-than-normal reduction last week, the Federal Reserve (Fed) sent a clear message that interest rates are heading considerably lower in the future. This, in turn, exerts some selling pressure on Greenback against the Canadian Dollar (CAD). 

Fed Officials penciled in another 50 basis points (bps) rate cuts by the end of the year and another 100 bps reductions by the end of 2025. Nonetheless, the release of US PCE data, the Fed’s preferred price metric, could give them hints about the US central bank’s path ahead. The headline PCE is expected to show an increase of 2.3% YoY in August, while the core PCE is projected to show a rise of 2.7% YoY in the same report. In the case of the hotter-than-expected inflation data, this could help limit the USD’s losses. 

On the Loonie front, Bank of Canada (BoC) Governor Tiff Macklem said on Tuesday that it is reasonable to expect more rate cuts as the BoC has made progress in bringing inflation back down to the 2% target. Meanwhile, the fall in crude oil prices could weigh on commodity-linked CAD as Canada is the largest oil exporter to the United States (US), and lower crude oil prices tend to have a negative impact on the CAD value.