USD/CAD refreshes almost three-month high near 1.3880 ahead of flash US PMI

• USD/CAD posts a fresh three-month high near 1.3880 as the US Dollar trades higher ahead of flash US S&P Global PMI data.
• Economists expect the US PMI to have grown moderately.
• This week, the major trigger for the US Dollar will be Fed Powell's speech at JH Symposium.

The USD/CAD pair trades firmly near a fresh almost three-month high around 1.3880 during the European trading session on Thursday. The Loonie pair demonstrates strength as the US Dollar (USD) trades firmly ahead of the preliminary United States (US) S&P Global Purchasing Managers' Index (PMI) data for August, which will be published at 13:45 GMT.

During the press time, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trades close to the weekly high near 98.40.

The PMI report is expected to show that the overall business activity at a moderate pace. The Services PMI is estimated to come in lower at 54.2 from 55.7 in July.

This week, the major trigger for the US Dollar will be US Dollar will be Federal Reserve (Fed) Chair Jerome Powell's speech at the Jackson Hole (JH) Symposium on Friday. Investors will pay close attention to Jerome Powell's speech to get cues about whether the US central bank will cut interest rates in the September policy meeting.

According to the CME FedWatch tool, there is an almost 81.6% chance that the Fed will cut interest rates by 25 basis points (bps) to 4.00%-4.25% in the September meeting.

Meanwhile, the Canadian Dollar (CAD) trades lower on expectations that the Bank of Canada (BoC) could reduce interest rates in the September policy meeting. Analysts at Bank of America (BofA) said the BoC to implement a 25-basis-point (bp) interest rate cut at its September 17 meeting, citing below-target headline inflation and weak core inflation momentum.

This week, investors will focus on the Canadian Retail Sales data for June, which will be published on Friday.