- The Canadian economy contracted unexpectedly during the second quarter.
- The CAD suffers a general fall after the Canadian GDP data.
- USD/CAD jumps towards 1.3550 despite general dollar weakness after NFP.
He USD/CAD broke above 1.3520 and rose to 1.3556, nearing Thursday’s highs, following the release of the US and Canadian Q2 jobs reports.
Canada’s real Gross Domestic Product (GDP) unexpectedly contracted at an annual rate of 0.2% in the second quarter, against expectations for a 1.2% expansion. First quarter growth numbers were revised down to 2.6% from 3.1%.
The disappointing data weighed on the CAD, which weakened broadly after the release. Next week the Bank of Canada (BOC) will meet, and no change in monetary policy is expected, especially given the growth numbers. The USD/CAD move higher was limited due to some US dollar weakness following the release of the official US employment report.
Nonfarm payrolls increased by 187,000 jobs in July, beating market expectations of 170,000. The unemployment rate rose from 3.5% to 3.8%. Median hourly earnings rose 4.3% from a year ago, below the 4.45% expected. The Dollar Index fell to 103.25, marking a new daily low, but later pared losses and rose to 103.50.
Stocks are trading above the 20-day SMA
Earlier on Friday, USD/CAD bottomed at 1.3489, the lowest level since August 16. It bounced moderately afterwards, gaining bullish momentum after the data.
Currently, the pair is rising after four consecutive days of declines and remains above the 20-day SMA which sits at 1.3515.
On the weekly chart, the USD/CAD pair is still down and is on track to post its first weekly decline after six straight weeks of gains.
technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
