Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

USD/CAD: Canadian Dollar Slips As GDP Contracts For Second Straight Month

Published 2019-03-01, 09:01 a/m
Updated 2023-07-09, 06:31 a/m

The Canadian dollar has lost ground in Friday’s North American session. Currently, the pair is trading at 1.3220, down 0.34% on the day. It’s a busy day for fundamentals. Canada’s GDP for December dropped 0.1%, shy of the estimate of 0.0%. In the U.S., Core PCE Price Index ticked up to 0.5%, while Personal Spending declined 0.5%. Later in the day, the U.S. releases ISM Manufacturing PMI and UoM Consumer Sentiment.

The U.S. received a GDP report card on Thursday, and the results were good. Advance GDP, which was released a month late due to the government slowdown, showed a gain of 2.6% in Q4. Although this was weaker than the 3.4% gain in Q3, it was well above the estimate of 2.2%. The unexpectedly solid reading can be credited to strong consumer spending and business investment. It’s hard to argue that the U.S. economy is not performing well, with a strong expansion of 3.1% in 2018. Even with the GDP release, it’s unlikely that the Federal Reserve will veer from it dovish stance.

It is Canada’s turn on Friday, with the release of GDP for December. Recent numbers have not been encouraging. The economy has declined by 0.1% in the past two months, and recent retail sales reports also pointed lower. The Bank of Canada hiked rates three times last year, but has since stayed on the sidelines, with the benchmark rate pegged at 1.75%. Inflation levels remain weak, as CPI posted a small gain of 0.1% in January, after two successive declines. With inflation well below the BoC’s target of 2%, it’s unlikely that the bank will raise rates unless the Canadian economy shows clear signs of improvement.

USD/CAD Fundamentals

Friday (March 1)

  • 8:30 Canadian GDP. Estimate 0.0%. Actual -0.1%
  • 8:30 US Core PCE Price Index. Estimate 0.2%. Actual 0.2%
  • 8:30 US Personal Spending. Estimate -0.2%. Actual -0.5%
  • 8:30 (Dec. Data) US Personal Income. Estimate 0.5%
  • 8:30 US Personal Income. Estimate 0.3%
  • 9:45 US Final Manufacturing PMI. Estimate 53.7
  • 10:00 US ISM Manufacturing PMI. Estimate 55.6
  • 10:00 US UoM Consumer Sentiment. Estimate 95.8
  • 10:00 US ISM Manufacturing Prices. Estimate 51.6
  • 10:00 US Revised UoM Inflation Expectations
  • All Day – US Total Vehicle Sales. Estimate 16.8M

*All release times are EST

*Key events are in bold

USD/CAD for Friday, March 1, 2019

USD/CAD for Feb. 28-March 1, 2019.

USD/CAD, March 1 at 8:50 EST

Open: 1.3175 High: 1.3226 Low: 1.3130 Close: 1.3220

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3049 1.3125 1.3200 1.3290 1.3383 1.3445

USD/CAD was flat in the Asian session and has posted small gains in European trade. The pair has recorded strong gains early in North American trade

  • 1.3200 has switched to a support role after strong gains by USD/CAD on Friday
  • 1.3290
  • Current range: 1.3200 to 1.3290

Further levels in both directions:

  • Below: 1.3200, 1.3125, 1.3049 and 1.2969
  • Above: 1.3290, 1.3383 and 1.3445

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.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.