Skip to main content

USD/CAD Climbs to 1-Mth High Ahead of Canadian GDP

#
  • Canada’s GDP expected to slow in March
  • US releases Core PCE Price Index
  • US/CAD hits 1-month high

The Canadian dollar is down sharply ahead of the North American session. In Europe, USD/CAD is trading at 1.3652, up 0.45%. Earlier, USD/CAD touched a high of 1.3668, its highest level in a month.

Canada’s GDP expected to ease

Canada’s economy is expected to have expanded in February by a modest 0.2%. This would be significantly lower than the 0.5% gain in January, but first quarter is expected around 2.8% y/y, which would indicate that the economy is in good shape. The IMF is projecting that Canada’s economy will expand by 1.5% in both 2023 and 2024, which would be the second-highest rate in the G7.

A strong GDP release later today would be good news but could complicate things for the Bank of Canada, which will have to decide whether to pause for a second straight time at the next meeting in June. The BoC summary of discussions ahead of the April meeting, released on Wednesday, indicated that the BoC considered raising rates at the meeting over concerns of sticky inflation and a surprisingly strong labour market. In the end, the BoC opted to hold rates at 4.5% and monitor economic data to determine whether further rate increases are needed. The BoC has projected that inflation will drop to 3% by mid-year, but noted in the summary that it is concerned whether further tightening will be needed to reach the inflation target of 2%. This shows that the BoC is still somewhat hawkish, and with more rate hikes a possibility, rate cuts do not appear to be on the table.

In the US, we’ll get a look at the Core PCE Price Index, which is considered the Fed’s favorite inflation gauge. The markets expect the index to stay unchanged in March at 0.3% m/m, and any surprises could move the dial on the US dollar. Investors will also be keeping an eye on Personal Spending and Income, which provide a snapshot of the strength of consumer spending.

USD/CAD Daily Chart
USD/CAD Daily Chart

USD/CAD Technical

  • USD/CAD is testing resistance at 1.3621. Next, there is resistance at 1.3702
  • 1.3482 and 1.3401 are providing support

Original Post


Trading analysis offered by RobotFX and Flex EA.
Source #Unknown
Labels:

Comments

Post a Comment

Popular posts from this blog

GBPUSD up and down. Back down testing 61.8% and swing area.

# GBPUSD tests 61.8% and swing area The GBPUSD is in an up and down day. The    GBPUSD  moved higher earlier. That move was helped by better than expected retail sales. However the high price today stalled near the high price from last week near 1.3643, and rotated back lower on the USD buying. The subsequent move lower now has the price back toward the 61.8% retracement along with a swing area between 1.35969 and 1.36034. As I type, the price has dipped below that swing area. What next? If the price can stay below the 1.36034 area, that would be the best case scenario for the sellers with the next major targets coming in at the 100 hour moving average 1.3569 (blue line), and the 200 hour moving average at 1.35609 (green line). The 50% midpoint of the 2022 trading range is just below those levels at 1.35526 and would be a another target on further weakness. A move back above 1.36034 with momentum would have traders looking again toward 1.3618 to 1.36271 and then t...
Post a Comment
Read more