- USD/CAD attracts some buyers on Friday on the back of modest USD strength.
- Bearish oil prices weigh on the CAD and offer support to the pair.
- The US Personal Consumption Expenditure (PCE) Price Index and Canada’s monthly GDP are expected to get some momentum.
The USD/CAD pair regains positive traction during the Asian session on Friday and looks to consolidate this week’s recovery move from the 1.3420 area, its lowest level since March 8. However, spot prices remain below the 1.3500 level as traders look forward to key macroeconomic data from the US and Canada before opening aggressive directional positions.
Canada’s monthly GDP report is due out later today, although market attention will remain focused on the US Personal Consumption Expenditure (PCE) Price Index. Crucial US inflation data will play a role. pivotal role in influencing market expectations on the Federal Reserve’s (Fed) rate cut trajectory, which, in turn, will boost demand for the US Dollar (USD) and provide a significant boost to the USD/USD pair. CAD.
Meanwhile, a modest rise in the USD, coupled with this week’s sharp drop in crude oil prices, which tends to weigh on the commodity-linked CAD, offers some support to spot prices. That said, bets on another large interest rate cut by the Fed in November keep the USD confined to a familiar range held for the past two weeks or so and within striking distance of the yearly low hit last week. pass.
Apart from this, the prevailing risk environment, driven by additional monetary stimulus measures from the People’s Bank of China (PBOC), should help limit the safe-haven US dollar. Therefore, it will be prudent to wait for strong follow-on buying before confirming that the USD/CAD pair has already bottomed in the short term and positioning for any further bullish movement.
Economic indicator
Gross Domestic Product (MoM)
The GDP published by Statistics Canada is the total value of goods and services produced in Canada. GDP is considered a measure of global economic activity and indicates the rate of growth of a country’s economy. A reading above expectations is bullish for the Canadian dollar, while a reading below is bearish.
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.
