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USDCAD advances after GDP data

Wednesday 31 August, 2022

Daily Currency Update

The Canadian dollar failed to gain momentum against the USD after it was reported that the Canadian economy expanded at a lower than expected pace in the second quarter of 2022. Gross domestic product (GDP) grew 3.3% annually in the second quarter and only edged up 0.1% in June, according to Statistics Canada. Real GDP growth was 0.8% in the second quarter of this year.  There’s little on the Canadian economic calendar for the rest of the week, so it’s likely that USDCAD direction could depend on USD strength.  On Friday, we’ll see US employment data which is projected to show a 300,000 payrolls increase in August. If Friday’s jobs report indicates a labor market that has added jobs at a moderately healthy pace, this could give the US Federal Reserve more reason to keep to a 75-basis-point rate hike in September – which could continue to benefit USD.  USDCAD was trading at 1.3197 at the time of writing.

Key Movers

The euro retraced slightly against the US dollar on Wednesday, after outperforming major counterparts through trade yesterday. A further depreciation in gas prices and hawkish ECB outlook helped support the embattled currency and foster a break back above parity. EURUSD was at 1.00085 at the time of writing.  GBPUSD remained under pressure amid the rising risk of recession in the UK. The pair tumbled below 1.17 yesterday. With inflation projected to hit 18% before January, the pound will likely face sustained headwinds as we move toward and through Q4. GBPUSD was trading at 1.1611 at the time of writing. 

Expected Ranges

  • EUR/CAD: 1.308 - 1.3138 ▲
  • GBP/CAD: 1.5222 - 1.528 ▼
  • AUD/CAD: 0.8971 - 0.9019 ▲
  • USD/CAD: 1.3022 - 1.313 ▲