Canadian Dollar Declines Against US Dollar on Weak GDP Data

The Canadian dollar today weakened against its US counterpart after the release of weak Canadian GDP data by Statistics Canada. Several releases from the US docket such as the personal income data for August also served to boost the US dollar against its Canadian counterpart.

The USD/CAD currency pair today rallied by about 85 points from its daily low hit during the mid-European session before the releases.

The Canadian dollar started the day’s session slightly stronger against the greenback as investors expected the GDP growth to meet expectations. However, the country’s GDP remained flat in July against the market consensus of 0.1% growth. The loonie has largely been weaker against the greenback after Bank of Canada Governor, Stephen Poloz gave a dovish speech on Wednesday. The loonie also ignored the stronger crude oil prices as tracked by the West Texas Intermediate, which was trading close to yesterday’s 2-month tops around $52.40.

The release of the US personal income data for August by the Bureau of Economic Analysis seemed to have boosted the greenback against the loonie. The core Personal Consumption Expenditure for August came in at 1.3%, which was lower than the expected 1.4%. The University of Michigan consumer sentiment survey also missed expectations by coming in at 95.1 versus the market consensus of 95.3.

The currency pair’s future performance is likely to be affected by the release of the Markit Canada Manufacturing PMI and the US ISM Manufacturing Index, both scheduled for Monday.

The USD/CAD currency pair was trading at 1.2497 as at 15:29 GMT having rallied from a low of 1.2412 earlier today. The CAD/JPY currency pair was trading at 90.08 having declined from a high of 90.64.

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