The USDCAD currency pair trended higher during the North American session as the US dollar rallied against its Canadian peer after Statistics Canada released disappointing Canadian GDP data.
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According to the latest GDP report, Canada’s GDP fell 0.1% in December 2022, missing analysts' expectations of 0% growth. The ripple effects saw the annualised Q4 GDP print come in at 0.0%, much lower than consensus estimates of 1.5% quarterly GDP growth.
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The results disappointed investors, which indicated that the Canadian economy was not performing as well as expected, as evidenced by the falling GDP print in December. However, the preliminary January GDP print salvaged the situation as it was recorded at 0.3%.
The improvement in Canada’s GDP growth in January saved the loonie from being crushed by the US dollar, which was gaining against it at writing. The Canadian dollar also did not benefit from the rising crude oil prices as concerns linger about the country’s economy.
The US dollar was also reeling from its problems after the US goods trade balance came in higher than expected at -$91.5 billion, compared to analysts' estimates of -$90.6 billion. Many leading currencies were gaining against the US dollar except for the Canadian dollar and the Japanese yen.
The outlook for the USDCAD currency pair is positive, as many expect the greenback to continue gaining ground against the loonie. The fundamentals also support a stronger US dollar as the Fed maintains its hawkish monetary policy stance, while the BoC might find it harder to keep hiking rates.
Investors are looking forward to the US Conference Board’s consumer confidence data, which is scheduled for release at expected to come in at 15:00 GMT. Analysts' consensus estimates are set at 108.5.
A better-than-expected figure would boost the US dollar driving the USDCAD pair higher, while a worse-than-expected figure could boost the Canadian dollar, which could reclaim some of its losses against the US dollar.
*This is not investment advice.
The USDCAD price chart.
The USDCAD currency pair traded higher in the American session after weak Canadian GDP data.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.