Much like summery weather in central Canada, the wave of optimism regarding the USD in the wake of U.S. President Donald Trump’s tax reform announcement and the encouraging speech by U.S. Federal Reserve Chair Janet Yellen regarding monetary policy has taken a break. Although the greenback did not give up all the gains made the previous day, it still found itself in the red against all the major currencies at market close.
This lull in important news will be very short-lived, however, with the release of July Canadian GDP data this morning. The consensus is currently calling for an annualized gain of 3.9%, down from the 4.3% reading in June and 4.7% in May. It would not be surprising for growth to have stagnated in July, with the negative contribution of consumer spending and home sales, based on data released earlier in September. However, this effect should be balanced out by a rise in housing starts.
In the United States, we will also be keeping an eye on Personal Income, Personal Consumption Expenditures and the Core PCE for August. On this last business day of September, volatility could be high.
Alexis Masson
Range of the day : 1.2350 – 1.2495