USD/CAD extends its decline on Thursday, slipping to a six-week low as the US Dollar (USD) weakens across the board following a sharp rally in the Japanese Yen (JPY). At the time of writing, the pair trades around 1.3996, staying on the back foot for a third consecutive day.
The latest leg lower came after USD/JPY plunged nearly 480 pips, sliding below the psychological 160.00 level. The speed of the move fuelled speculation that Japanese authorities may have intervened in the foreign exchange market to support the Yen.
Earlier on Thursday, weaker-than-expected US second-quarter Gross Domestic Product (GDP) data and softer core Personal Consumption Expenditures (PCE) inflation prompted traders to scale back bets on a September Fed rate hike. The CME FedWatch Tool shows around a 55% probability of a 25-basis-point (bps) increase, down from roughly 60% before the data.
However, inflation…
