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• USD/CAD strengthens to near 1.3645 in Friday’s early Asian session. 
• Canadian Retail Sales fell by 1.1% MoM in May, weighing on the Canadian Dollar. 
• Renewed concerns about the Trump administration and the Fed might cap the upside for the pair. 

The USD/CAD pair edges higher to around 1.3645 during the early Asian session on Friday. Disappointing Canadian economic data weighs on the Canadian Dollar (CAD) against the Greenback. The US Durable Goods Orders for June will be released later on Friday. 

Data released by Statistics Canada on Thursday revealed that the country’s Retail Sales declined by 1.1% MoM in May versus 0.3% prior. This figure aligned with expectations. Economists closely monitor Retail Sales as they offer insight into GDP trends. Investors are concerned about the timing and magnitude of tariffs threatened by US President Donald Trump, which brought forward purchases. The Loonie has weakened as Retail Sales data showed that the domestic economy is softening. 

Additionally, investors remain cautious as a deadline of August 1 looms before US President Donald Trump begins to impose new tariffs. Canadian Prime Minister Mark Carney said earlier this week that the country "will not accept a bad deal" with the US. 

On the USD’s front, Trump added to pressure on Federal Reserve (Fed) Chair Jerome Powell with a visit to the Fed's Washington offices. Trump and Powell discussed the costs of ongoing renovations at the Fed's headquarters. Any surprise move that escalates tensions between the administration and the Fed or renewed concerns over the Fed’s independence could drag the US Dollar (USD) lower in the near term. 

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