USD/CAD flat lines near 1.3600, traders brace for US PMI/ Canadian Retail Sales data

• USD/CAD trades flat around 1.3600 in Thursday's early Asian session. 
• Risk-on sentiment from new US trade deal supports the Canadian Dollar. 
• The flash US July PMI and Canadian May Retail Sales reports will be released later on Thursday. 

The USD/CAD pair holds steady near 1.3600 during the early Asian session on Thursday. However, positive sentiment from a new US trade deal could improve the global economic outlook and lift the Canadian Dollar (CAD). The preliminary reading of US Purchasing Managers Index (PMI) reports for July and Canadian Retail Sales data for May will be the highlights later on Thursday.

The Financial Times reported that the EU and the US are closing in on a deal that would impose 15% tariffs on EU goods imported into the US. Progress in US-EU trade negotiations adds to the positive mood and boosts riskier assets like the CAD. 

Meanwhile, investors will closely monitor trade agreements between the US and Canada. Canadian Prime Minister Mark Carney said earlier this week that the country "will not accept a bad deal" with the US, as a deadline of 1 August looms before US President Donald Trump begins to impose new tariffs. 

On the other hand, a decline in Crude Oil prices could undermine the commodity-linked Loonie and create a tailwind for the pair. 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.

Traders will keep an eye on the Canadian Retail Sales data for May, due later on Thursday, which is expected to decline 1.1%. Still, analysts expect the Bank of Canada (BoC) to keep its benchmark interest rate unchanged at 2.75% next week, following recent data that showed underlying inflation remaining well above target.