- USD/CAD hit session highs above 1.2600 after disappointing Canadian GDP data.
- Attention now turns to upcoming US data, the Biden/Powell meeting and whether the dollar’s strength at the end of the month can continue.
The CAD, which had held up relatively well against a strengthening US dollar, has pulled back in recent trading on weaker-than-expected Canadian GDP data. It is true that the month-on-month growth pace in March was stronger than expected, at 0.7%, but GDP growth as a whole for the first quarter was much lower than expected, with an annualized quarterly pace of 3.1%, versus expectations of 5.4%.
This has been enough for USD/CAD to hit fresh session highs at the 1.2680 zone, with the pair now trading around 0.2% gains on the day. Earlier, rising oil prices as a result of Tuesday’s EU deal to quickly phase out all Russian crude imports by sea had been weighing on the pair.
Traders will assess whether the dollar’s month-end strength can continue when US markets reopen after the long weekend, or the recent weakening trend as a result of easing US inflation concerns .and bets on Fed tightening begin to weigh again.
Technical levels
Source: Fx Street
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