USD/CAD Yawns As Canadian GDP Beats Estimate

USD/CAD Yawns As Canadian GDP Beats Estimate

Kenny Fisher  | Jul 31, 2020 09:03

It has been a quiet day for USD/CAD, as we wrap up the trading week. The pair is currently trading at 1.3423, up 0.01%. On the release front, Canada’s GDP for May climbed 4.5%, beating expectations. In the U.S. Core PCE Price Index, which is reportedly the Federal Reserve’s preferred inflation indicator, rose from 0.1% to 0.2%.

U.S. GDP Plunges

Analysts had braced for a disastrous U.S. GDP in Q2, and the release was almost as bad as feared. The initial estimate for GDP came in at -32.9%, only slightly better than the forecast of -34.5%. The dismal reading weighed on the U.S. dollar against the major currencies, but the greenback still managed strong gains against the Canadian dollar. This move reflects the old adage of “when the U.S. sneezes, Canada catches a cold.” With some 75% of Canadian exports heading south of the border, Canada’s economy will have trouble getting any traction without a recovery in the U.S.

Canada’s GDP Bounces Back

Unlike the U.S., which releases GDP every quarter, Canada publishes GDP on a monthly basis. After two straight declines, is the worst over? The May release showed that the economy grew 4.5%, beating the estimate of 3.5%. This follows declines of 7.2% and 11.6%. However, early in the North American session, the Canadian dollar hasn’t taken advantage of the strong reading, as the pair is almost unchanged on the day.

USD/CAD Technical

USD/CAD moved slightly upwards in the Asian session but then gave up these gains. The pair was flat in European trade and has shown limited movement in the North American session.

  • 1.3475 is the next line of resistance. Above, we find resistance at 1.3530
  • 1.3349 is providing support, followed by support at 1.3278
  • USD/CAD tested the 10-day MA on Thursday. If the pair can push above this line, it is a bullish signal for USD/CAD

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Related Articles

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Frank Zhang
Frank Zhang

I suspect US$ will reach 1.35~1.37 by August  ... (Read More)

Jul 31, 2020 19:28 GMT· Reply
Frank Zhang
Frank Zhang

Compare $  ... (Read More)

Jul 31, 2020 19:25 GMT· Reply
Discussion
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (UK) English (India) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
NoYes
CancelYes
Saving Changes

+

Download the Investing.com App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.

Investing.com is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.