USD/CAD sits near multi-week top, below mid-1.4400s ahead of US PCE Price Index

USD/CAD attracts buyers for the sixth straight day amid the ongoing USD recovery.

Concerns about Trump’s tariffs and softer Oil prices further undermine the Loonie. 

Traders await the release of the US PCE data before placing fresh directional bets.

The USD/CAD pair builds on the previous day's breakout momentum above the 50-day Simple Moving Average (SMA) and gains positive traction for the sixth successive day on Friday. The momentum lifts spot prices to a near four-week top, around the 1.4450-1.4455 area during the Asian session, and is sponsored by some follow-through US Dollar (USD) buying. 

The second reading of the US Gross Domestic Product (GDP) released on Thursday showed that inflationary pressures continue to rise. Apart from this, worries that US President Donald Trump's policies would reignite inflation suggest that the Federal Reserve (Fed) will stick to its hawkish stance. This assists the USD Index (DXY), which tracks the Greenback against a basket of currencies, in prolonging this week's recovery move from over a two-month low and acts as a tailwind for the USD/CAD pair. 

Furthermore, concerns about the economic fallout from Trump's tariff plans weigh on the Canadian Dollar (CAD) and also lend support to the currency pair. In fact, Trump confirmed that his proposed tariffs on Canada and Mexico would come into effect on March 4, as scheduled. This, along with a modest downtick in Crude Oil prices, undermines the commodity-linked Loonie and provides an additional lift to the USD/CAD pair. Traders, however, seem reluctant ahead of the crucial US inflation data. 

The US Personal Consumption Expenditure (PCE) Price Index is due for release later during the early North American session and will influence the Fed's interest rate outlook. This, in turn, will play a key role in driving the USD demand in the near term. Apart from this, Oil price dynamics might produce short-term trading opportunities around the USD/CAD pair on the last day of the week. Nevertheless, spot prices remain on track to end on a positive note for the second successive week.