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Canadian Dollar Weak Despite Upbeat Q1 GDP as US Dollar Rallies

May 29, 2020 at 13:57 by Simon Mugo

All the Canadian dollar bills denominations

The Canadian dollar today remained weak against the US dollar despite the release of upbeat Canadian GDP data in the early American session. The USD/CAD currency pair kept trading near the two and half month lows as investors waited patiently for Trump’s speech.

The USD/CAD currency pair recovered from a daily low of 1.3714 and was headed towards its Asian session high of 1.3793 at the time of writing.

The loonie has been stronger than the dollar for most of this week, which has seen the USD/CAD currency pair recording a weekly loss of over 250 pips. The risk-on market sentiment boosted the loonie as global stocks rallied amid the looming change of guard at the Bank of Canada as Governor Stephen Poloz‘s term ends and Tiff Macklem takes over. The unpredictable action in the global crude oil markets as tracked by West Texas Intermediate had a muted impact on the pair. The release of the upbeat Canadian GDP data by Statistics Canada had a muted effect on the pair despite both the monthly and yearly figures beating expectations.

The recovery by the US dollar after the release of the mixed US personal consumption expenditure report for April also contributed to the pair’s recovery. According to the Bureau of Economic Analysis, US personal income was better than expected, while personal spending was lower than expected.

The currency pair’s future performance is likely to be affected by Crude oil prices and US dollar dynamics.

The USD/CAD currency pair was trading at 1.3775 as at 13:56 GMT having recovered from a low of 1.3714. The CAD/JPY currency pair was trading at 78.08, having rallied from a low of 77.78.

If you have any questions, comments, or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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