- Canadian Dollar is seeing mixed results but drops against US Dollar on Wednesday.
- Canada Current Account posts smaller rebound than expected.
- US GDP outpaces expectations, weighing on Tuesday’s Fed pivot expectations.
The Canadian Dollar (CAD) is mixed against the other major currencies on Wednesday and drifting into the midrange against the US Dollar (USD). The Loonie climbed nearly three-tenths of a percent against the US Dollar on Wednesday before paring back into the day’s opening bids.
Canada’s trade balance rebounded in the third quarter but still missed expectations with the Canadian Current Account printing a CAD $-3.22 billion decline. The second quarter’s print was revised even lower to $-7.32 billion.
Daily Digest Market Movers: Canadian Dollar draws back against Greenback as markets twist
- Canadian Current Account was expected to post a billion CAD gain but shrunk by an additional $3.22 billion on Wednesday.
- The previous print also got revised lower from $-6.63 billion, steepening the CAD’s trade imbalance.
- US Gross Domestic Product (GDP) growth beat the market to post an accelerated 5.2% for the third quarter, beating the forecast for 5.0% and the second quarter’s 4.9% growth.
- US Personal Consumption Expenditure (PCE) Prices for the third quarter missed expectations, and mixed data results are clouding the USD’s outlook.
- PCE Prices ticked lower to 2.8%, markets were expecting a hold at the second quarter’s print of 2.9%.
- Fedspeak is back on the offering on Wednesday after Tuesday’s comments sparked a broad-market bid.
- The President of the Federal Reserve (Fed) Bank of Richmond hit newswires in the US market session, striking a notably more hawkish tone than Fed Governor Christopher Wallace on Tuesday.
- President Barkin remains skeptical that 2% inflation can be achieved from here without additional tightening or at least maintaining the Fed’s “higher for longer” stance.
Canadian Dollar price today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the weakest against the Swiss Franc.
USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
USD | 0.37% | 0.30% | 0.34% | 0.76% | 0.20% | 0.09% | -0.18% | |
EUR | -0.36% | -0.05% | -0.03% | 0.37% | -0.17% | -0.29% | -0.55% | |
GBP | -0.31% | 0.05% | 0.04% | 0.44% | -0.12% | -0.25% | -0.48% | |
CAD | -0.33% | 0.04% | -0.03% | 0.44% | -0.14% | -0.24% | -0.53% | |
AUD | -0.76% | -0.38% | -0.44% | -0.43% | -0.55% | -0.65% | -0.92% | |
JPY | -0.20% | 0.18% | 0.11% | 0.14% | 0.58% | -0.09% | -0.37% | |
NZD | -0.06% | 0.27% | 0.22% | 0.25% | 0.68% | 0.11% | -0.27% | |
CHF | 0.17% | 0.54% | 0.48% | 0.51% | 0.94% | 0.37% | 0.28% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Technical Analysis: Canadian Dollar falls back against Greenback, USD/CAD claws back recent losses, looks to price in floor from 1.3550
The Canadian Dollar (CAD) is paring away Wednesday’s gains against the US Dollar (USD), sending the USD/CAD back a third of a percent from Wednesday’s low bids near 1.3550. Intraday action is seeing congestion near the 1.3600 handle for the day.
The USD/CAD still has some room to fall before coming into contact with the 200-day Simple Moving Average (SMA) near 1.3520, but an extended rebound will see a technical ceiling from the 50-day SMA just below 1.3700.
The pair is still seeing some pull from the rising trendline drawn from July’s lows near 1.3100, and the USD/CAD’s recent decline through the technical barrier sees the Loonie beginning to run out of bearish chart space with technical indicators leaning toward the oversold side.
The Relative Strength Index (RSI) is approaching oversold conditions, while the Moving Average Convergence-Divergence (MACD) indicator has the fast signal line declining below the midline, a sign that selling pressure could run out of steam in the near future.
USD/CAD Daily Chart
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022.
Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency.
When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
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