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Canadian Dollar Gets Boost As GDP Beats Estimate

Published 2019-03-29, 03:15 p/m
Updated 2023-07-09, 06:31 a/m

The Canadian dollar has posted strong gains on Friday. Currently, the pair is trading at 1.3348, down 0.69% on the day. On the release front, it’s a busy day on both sides of the border. Canada’s GDP in January grew by 0.3%, better than the estimate of 0.1%. As well, the Raw Materials Price Index posted a strong gain of 4.6% in February, its strongest gain since December 2017. In the U.S., consumer data was soft, as the Core PCE Price Index and Personal Spending posted weak gains and missed their estimates. Later in the day, the U..S. releases UoM Consumer Sentiment, which is expected to jump to 97.8 points.

Investors are keeping a close eye on the ebb and flow of the U.S.-China trade talks, which continues to affect the movement of currency markets. The negotiations between the sides continues and there have been reports of progress. However, optimism waned on Thursday, after a senior U.S. official said that it could be months before a deal is reached. These remarks have raised risk aversion and boosted the dollar.

Global trade tensions have weighed on inflation levels in the developed economies, and the U.S. is no exception. However, with the Fed saying it will put a hold on rates until 2020, could that change? At the Fed policy meeting, policy-makers lowered their inflation forecast for 2020, citing weakness in the Chinese and European economies. However, the chief economist of Credit Suisse (SIX:CSGN), James Sweeney, has taken a different tack, saying that U.S. inflation could climb as high as 2.3% next year, in response to the lack of rate hikes. Sweeney said that although inflation remains below the Fed target of 2.0%, there are signs in the services sector of inflation picking up.

USD/CAD for Friday, March 29, 2019

USD/CAD for March 28-29, 2019.

USD/CAD, March 29 at 9:00 EST

Open: 1.3441 High: 1.3443 Low: 1.3346 Close: 1.3348

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3125 1.3200 1.3290 1.3383 1.3445 1.3552

USD/CAD showed little movement in the Asian session and is slightly lower in European trade. The pair has posted strong losses early in North American trade

  • 1.3290 is providing support
  • 1.3383 is the next resistance line
  • Current range: 1.3290 to 1.3383

Further levels in both directions:

  • Below: 1.3290, 1.3200 and 1.3125
  • Above: 1.3383, 1.3445, 1.3552 and 1.3662
  • 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.

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