Canadian Dollar consolidates near weekly low as USD bulls seem hesitant

The Canadian Dollar (CAD) is currently hovering around the 1.3875-1.3880 range as the USD/CAD pair consolidates near a weekly low during the Asian trading session on Thursday. While the recent opening of the Strait of Hormuz has provided some support to the commodity-linked Loonie, the ongoing Russia-Ukraine war and US-Canada trade tensions continue to underpin the USD.

Furthermore, the US inflation data released on Wednesday has kept the Federal Reserve's rate hike expectations alive, which has helped the US Dollar preserve its gains and support the USD/CAD pair. The recent escalation of the Russia-Ukraine war, including a drone strike on one of Russia's largest oil refineries, has also contributed to the support for crude oil prices.

Traders are currently hesitant to take significant directional bets and are waiting for further clues about the Federal Reserve's future policy stance. The next important event for the USD/CAD pair will be the speech by Bank of Canada Governor, Kevin Warsh, at the Jackson Hole Symposium on Friday. In the near-term, the EUR/USD pair is under renewed selling pressure, slipping to mid-1.1600s, while GBP/USD has reversed its bullish trend and is now below 1.3600 following solid US data releases and geopolitical tensions.