• USD/CAD extends recovery 1.3715 in Thursday’s Asian session. 
• The US CPI inflation dropped to 2.9% YoY in July from 3% in June, softer than expected.
• Lower crude oil prices weigh on the commodity-linked Canadian Dollar. 

The USD/CAD pair trades on a stronger note near 1.3715 on Thursday during the Asian trading hours. The decline in crude oil prices drags the commodity-linked Canadian Dollar (CAD) lower and lifts USD/CAD. Amid the lack of top-tier economic data from Canada, the pair remains at the mercy of USD price dynamics. The US Retail Sales will be the highlight on Thursday. 

The US Consumer Price Index (CPI) inflation report indicated that price pressures are on track to return to the Federal Reserve (Fed) 2% target. Nonetheless, the speculation of a deeper rate cut from the Fed has eased. According to the CME FedWatch Tool, traders have priced in nearly a 41% possibility of a 50 basis points (bps) rate cut by the Fed in September, down from 50% before the US CPI data. This, in turn, provides modest support to the Greenback.