• USD/CAD comes under some renewed selling pressure on Friday amid a modest USD downtick.
• A recovery in global risk sentiment is seen weighing the safe-haven buck and exerting pressure.
• Hawkish Fed expectations should limit the USD fall and lend support ahead of the US PCE data.

The USD/CAD pair struggles to capitalize on the previous day's goodish rebound from a one-week low and meets with a fresh supply on Friday. The pair remains depressed heading into the European session and is currently placed near the lower end of its daily range, around the 1.3630-1.3625 region.

A modest recovery in the US equity futures prompts some selling around the safe-haven US Dollar, which, in turn, is seen as a key factor weighing on the USD/CAD pair. The USD downtick, however, is likely to remain limited amid reviving bets for a more aggressive policy tightening by the Fed, bolstered by the upbeat US macro data released on Thursday.

In fact, the US GDP growth for the third quarter was revised higher to show that the economy expanded by 3.2%, faster than the 2.9% estimated previously. Adding to this, the number of Americans filing new claims for unemployment-related benefits increased less than expected during the week ended December 17, pointing to a still-tight labour market.

The resilient US economy could allow the Fed to continue raising borrowing costs, which, in turn, continues to act as a tailwind for the US Treasury bond yields and favours the USD bulls. Meanwhile, subdued action around crude oil prices fails to provide any impetus to the commodity-linked Loonie and could further lend support to the USD/CAD pair.

Traders, however, might refrain from placing aggressive bets and prefer to wait on the sidelines ahead of Friday's release of the US Personal Consumption Expenditure (PCE) data. The Core PCE Price Index - the Fed's preferred inflation gauge - will be looked upon for fresh cues on inflation and influence the US central bank's decision on future rate hikes.

This, in turn, will play a key role in driving the USD demand in the near term and provide some meaningful impetus to the USD/CAD pair on the last day of the week. Apart from this, oil price dynamics should further contribute to producing short-term trading opportunities around the major.