Canadian Dollar Rallies On Upbeat GDP Data And A Softer USD -

Canadian Dollar Rallies On Upbeat GDP Data And A Softer USD

Mar 28, 2024Jeremy ParkinsonFinance0

Photo by Michelle Spollen on Unsplash
The Canadian Dollar (CAD) is trading higher for the fourth consecutive day on Thursday, yet with price action contained within previous ranges. Canada’s Gross Domestic Product bounced up strongly in January with preliminary estimations for February pointing to further economic expansion. These figures have restored confidence in Canada’s economic outlook, cooling off market expectations of imminent BoC rate cuts.In The US, the larger-than-expected decline in US Weekly Jobless Claims and the upwardly revised Q4 Gross Domestic Product have been unable to provide a meaningful impact to the US Dollar. The Greenback is paring previous gains after having opened Thursday on a strong note, following hawkish remarks from Fed Governor Waller.

The US Dollar Index, which measures the value of the USD against a basket of the most traded currencies, is practically unchanged on the daily chart at the US session opening time. Investors are showing caution with all eyes on Friday’s US PCE Prices Index and a speech by Federal Reserve (Fed) Chair Jerome Powell at a monetary policy conference in San Francisco. Traders are looking for further clues about the central bank’s monetary policy plans.

Daily digest market movers: USD/CAD pulls back as the Canadian economic outlook improves

The Canadian Dollar is moderately bullish on its way to complete a four-day winning streak, favoured by upbeat Canadian data.

Canadian GDP expanded at a 0.6% pace in January, beating expectations of 0.4% growth and following a 0.1% contraction in December.

US Jobless Claims declined to 210K in the week of March 22 from 212K in the previous week against market expectations of an increase to 215K.

Continuous Jobless claims have increased to 1.189M from 1.795M in the previous week, offsetting the impact of the upbeat headline reading.

The final reading of the Q4 US GDP has been revised to a 3.4% growth from the 3.2% expansion previously estimated.

Futures markets are pricing a 55% chance that the Fed will start cutting rates in June, down from levels above 60% on Wednesday, CME Group FedWatch Tool shows.

Fed Governor Christopher Waller warned that there is no rush to start cutting rates, which has poured some cold water on the market consensus of three rate cuts in 2024.

The highlight of the week is that the core PCE Prices Index is expected to have risen at a 2.8% yearly pace and 0.4% on the monthly rate in February, from 2.8% and 0.3%, respectively, in January.

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 .

USD EUR GBP CAD AUD JPY NZD CHF USD 0.15% -0.08% -0.41% 0.08% 0.06% 0.21% -0.50% EUR -0.15% -0.23% -0.54% -0.09% -0.10% 0.05% -0.65% GBP 0.07% 0.22% -0.32% 0.15% 0.15% 0.28% -0.42% CAD 0.37% 0.52% 0.30% 0.45% 0.43% 0.58% -0.12% AUD -0.08% 0.07% -0.13% -0.47% 0.01% 0.13% -0.57% JPY -0.06% 0.10% -0.13% -0.41% 0.03% 0.14% -0.54% NZD -0.21% -0.05% -0.29% -0.60% -0.12% -0.11% -0.69% CHF 0.48% 0.63% 0.41% 0.11% 0.55% 0.54% 0.70%

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: The USD is under increasing bearish pressure, heading to 1.3520
The USD/CAD is under increasing bearish traction after having been rejected at 1.3610 on its way to 1.3520 support area. The RSI has dipped below the 50 level, which suggests that sellers are in control.

The broader picture is still mildly positive, with the pair trading within a slightly bullish channel. A break of 1.3460 would negate this view. On the upside, resistance levels are 1.3615 and 1.3630.

USD/CAD 4-Hour Chart
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