Home » Daily Commentaries » CAD weakens after disappointing GDP

CAD weakens after disappointing GDP

Tuesday 31 August, 2021

Daily Currency Update

CAD - Canadian DollarThe Canadian dollar weakened against the US dollar after data showed that the economy unexpectedly stalled through spring and early summer. USDCAD was up 0.19%, trading at 1.2628 at the time of writing. Gross domestic product shrank 1.1% in the second quarter on an annual basis, according to Statistics Canada. This was well below economist expectations of an increase of 2.5%.Meanwhile in the US, analysts will be watching Friday’s US payrolls numbers very closely for any signs that may prompt the US Federal Reserve to start tapering stimulus. With Powell highlighting the importance of a labor market recovery in guiding FOMC policy decisions, we are keenly attuned to any deviation from expectation as a possible catalyst to spark direction.

Key Movers

Stronger than expected Eurozone inflation pushed up the euro, but EURUSD fell off three-week highs after a US consumer confidence report disappointed market expectations. Dollar weakness also gave sterling a slight boost on Tuesday morning. GBPUSD broke through 1.38 briefly but fell down again to trade around 1.3757. Some analysts pointed to elevated COVID-19 cases in the UK and investors rebalancing their portfolios for month-end as factors for downward pressure on the pound.

Expected Ranges

  • EUR/CAD: 1.4868 - 1.4933 ▲
  • GBP/CAD: 1.7316 - 1.7417 ▲
  • AUD/CAD: 0.9191 - 0.9241 ▲
  • USD/CAD: 1.257 - 1.2651 ▲