- MarketPulse - https://www.marketpulse.com -

USD/CAD – Canadian dollar steady as US GDP sparkles

The Canadian dollar has ticked higher in the Friday session. Currently, USD/CAD is trading at 1.3068, down 0.08% on the day. On the release front, there are no Canadian indicators on the schedule. In the U.S, Advance GDP gained 4.1% in the second quarter, just shy of the estimate of 4.2%. This marked the strongest quarter of economic growth since 2014. Later in the day the U.S releases Consumer Sentiment, which is forecast to drop to 97.1 points.

Investors remained worried about the prospect of a full-blown trade war, as the U.S and its trading partners have in engaged in a tariff battle. However, the mood this week was one of “reconciliation” rather than “retaliation”, at least between the U.S and the European Union. A meeting between EU Commission President Jean-Claude Juckner and U.S President Trump was successful, as the two leaders agreed to take concrete steps to eliminate tariffs and improve the trade relationship between the U.S and the EU, which has been battered in recent weeks. President Trump agreed to hold back on any further tariffs while talks are ongoing. This is a major concession from Trump, who just last week had threatened to impose tariffs on European car imports. The agreement with the Europeans showed some surprising flexibility on the part of Trump, and Canadian policymakers are hoping that the conciliatory U.S stance will extend to the NAFTA negotiations with Canada and Mexico. The U.S has insisted on far-reaching changes to the pact, including its renegotiation in five years. If its demands aren’t met, the Trump administration has said it could pursue separate free trade agreements with Canada and Mexico. However, the latter two countries would like to maintain a trilateral arrangement. If the parties do reach a new agreement, the Canadian dollar would likely move higher.

The Canadian dollar posted strong gains on Wednesday, following an Energy Information Administration (EIA) report which showed a huge decline of 6.1 million in U.S crude inventories. This is the second decline in three months, and was much higher than the estimate of 2.6 million. Growing tensions between Iran on the one hand and the U.S and Saudi Arabia on the other have also raised concerns about oil supplies, and higher crude prices have boosted the Canadian dollar.

  Yen buoyed as inflation tops estimates [1]

  U.S. Economy grew 4.1% rate in Q2 [2]

USD/CAD Fundamentals

Friday (July 27)

*All release times are DST

*Key events are in bold

USD/CAD for Friday, July 27, 2018

USD/CAD, July 27 at 8:00 DST

Open: 1.3078 High: 1.3080 Low: 1.3053 Close: 1.3074

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2831 12970 1.3067 1.3160 1.3292 1.3436

USD/CAD inched lower in Asian trade but has made up these losses in the European session

Further levels in both directions:

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.

Kenny Fisher

Kenny Fisher [6]

Currency Analyst at Market Pulse [7]
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.
Kenny Fisher

Latest posts by Kenny Fisher (see all [6])