USD/CAD Declines After Release of Canada’s GDP Data

The USD/CAD today declined significantly after the release of Canadian GDP data by Statistics Canada, which exceeded market expectations. The decline was short-lived as the US dollar rallied higher after the release of the University of Michigan’s confidence and expectations data for March.

At the height of it decline, the currency pair lost over 50 points as the Canadian dollar rallied against the greenback. The currecy pair was on a choppy trade today as it declined, then rallied higher, and finally declined as at the time of writing.

There was increased buying pressure on the Canadian dollar after GDP data released by Statistics Canada indicated that Canada’s economy grew by 0.6% in January versus the expected 0.3%, resulting in an annualized GDP growth of 2.3%, as compared to the expected 1.9%. The Canadian dollar rallied against the greenback despite the declining crude oil prices as tracked by the WTI, which was trading at prices around $50.00, just slightly above Monday’s low of $47.00.

The currency pair was also affected by the release of the Chicago Purchasing Managers Index, which was recorded at 57.7 beating the market expectation of 56.9. The release of the University of Michigan’s confidence and expectations data for March, which was lower than expected also affected the currency pair.

The currency pair is likely to be affected by the release of the Markit Canada Manufacturing PMI on Monday.

The USD/CAD currency pair was tarding at 1.3292 as at 18:23 GMT having dropped from a high of 1.3368 prior to the release. The AUD/CAD was trading at 1.0162 having dropped from a high of 1.0214 earlier today.

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