Canadian Dollar Retreats from Two-Month High Amid US Inflation Expectations

The Canadian dollar retreated from its two-month high against the US dollar on Friday, as the greenback preserved its weekly gains and traders positioned for the upcoming US Consumer Price Index (CPI) report.

The USD/CAD pair edged higher during Friday's session, pulling the loonie away from the peak it reached earlier in the week. This reflects a broader stabilization in the US dollar, which has been recovering ground after a volatile period driven by shifting expectations around Federal Reserve policy.

The market is now focused on the next US inflation print, scheduled for release next week. The CPI report is expected to be a key determinant for the Fed's interest rate path, influencing the dollar's trajectory and, by extension, the USD/CAD exchange rate.