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• USD/CAD snaps a four-day losing streak, steadies above 1.3600 on Thursday
• Canada’s May Retail Sales fall 1.1% MoM, in line with forecasts; Core Retail Sales down 0.2%.
• US flash Composite PMI jumps to 54.6 in July, Services PMI beats at 55.2; Manufacturing slips into contraction.

The Canadian Dollar (CAD) loses against the US Dollar (USD) on Wednesday as the Greenback finds its footing after a volatile start to the week. The US Dollar is drawing mild support from stabilizing Treasury yields and improving global risk sentiment, with optimism around a potential US-EU trade deal helping ease investor jitters.

The USD/CAD pair inches modestly higher on Wednesday, snapping a four-day losing streak as buyers step back in near the 1.3600 psychological level. At the time of writing, the pair is trading around 1.3620 during the American session, up about 0.15% on the day.

The Loonie’s pullback comes after Canadian Retail sales fell by -1.1% in May, matching market expectations but marking a sharp reversal from April’s 0.3% rise. Meanwhile, Core Retail Sales excluding autos dropped 0.2%, a slight improvement over the expected -0.3% print, although still indicating softening consumer demand.

In the United States, preliminary S&P Global Purchasing Managers Index (PMI) data for July offered a mixed view of economic momentum. The flash Composite PMI rose to 54.6, up from 52.9 in June, signaling the fastest pace of overall business activity in seven months. The Services PMI jumped to 55.2, beating expectations of 53.0 and reflecting solid demand in the services sector. However, the Manufacturing PMI dropped to 49.5, down from a prior reading of 52.0 and below the forecast of 52.5, slipping into contraction territory.

Separately, US Initial Jobless Claims fell to 217,000 in the week ending July 19, down from 221,000 and better than the expected 227,000, marking the lowest reading since mid-April. The data reflects continued resilience in the labor market, even as broader market sentiment keeps the Greenback under modest pressure. Continuing Claims, which reflect those still receiving benefits, rose slightly to 1.955 million, pointing to a gradual cooling in re-employment.

Despite signs of economic strength, the data failed to lift the US Dollar. The US Dollar Index (DXY), which tracks the Greenback against a basket of major peers, is edging lower and was last seen around 97.17 after holding firm earlier in the day. Lingering concerns over ongoing tariff uncertainty and Federal Reserve's (Fed) independence continue to weigh on sentiment.

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