USD/CAD weakens to below 1.3750 as traders assess US data releases

• USD/CAD softens to around 1.3740 in Friday's early Asian session. 
• Fed's Waller said July rate cut justified by rising risks.
• US Retail Sales rose 0.6% MoM in June, stronger than expected. 

The USD/CAD pair trades in negative territory around 1.3740 during the early Asian session on Friday. The dovish remark from the Federal Reserve (Fed) officials weighs on the US Dollar (USD). Traders brace for the preliminary reading of the University of Michigan Consumer Sentiment, followed by Building Permits and Housing Starts. 

Fed Governor Christopher Waller said late Thursday that he believes that the US central bank should reduce its interest rate target at the July meeting, citing mounting economic risks. Waller added that delaying cuts runs the risk of needing more aggressive action later. Dovish comments from Fed policymakers could undermine the Greenback against the Canadian Dollar (CAD). 

Financial markets are now pricing in a September starting date for rate cuts and Fed officials penciled in two reductions at their June meeting, according to Reuters. 

On the other hand, stronger-than-expected US Retail Sales might help limit the USD's losses. Data released by the US Census Bureau on Thursday showed that the US Retail Sales rose by 0.6% MoM in June versus -0.9% prior. This figure came in below the market consensus of 0.1%. On a yearly basis, Retail Sales climbed 3.9% in June, compared to a rise of 3.3% in May.

Meanwhile, a decline in Crude Oil prices could drag the commodity-linked Loonie lower in the near term. It's worth noting that Canada is the largest oil exporter to the US and lower crude oil prices tend to have a negative impact on the CAD value.