Home Daily Commentaries The Loonie found some relief after the release of GDP numbers.

The Loonie found some relief after the release of GDP numbers.

Daily Currency Update

CAD - Canadian DollarThe Loonie trades flat after overnight losses and after Canada's quarterly annualized GDP in the 4th quarter expanded 0.3 percent, matching the forecast. However, the revised prior number was 1.1 percent, down from 1.3 percent. At the same time, the monthly GDP by industry grew most since May. Transportation, mining, and energy led the gains, with 15 of 20 industries posting gains in the broadest industry growth since June 2019. However, utilities dragged. According to Statistics Canada, the slow GDP was due to a decrease in business investment and weak international trade, offset by increased household spending. The annual growth rate of Canada's real GDP was 1.6 percent for 2019, a deceleration from the 2.0 percent growth in 2018. By comparison, real GDP in the United States increased 2.3 percent. The USD/CAD pair trades at 1.3447, up 0.41 percent.

Key Movers

The U.S. dollar traded flat versus G10 currencies this morning, but it touched a one-week low early today and it is bouncing at this moment. The EUR/USD pair trades at 1.0981, falling 0.17 percent (strong Greenback). The market driver this morning continues to be the Coronavirus and it is impacting the markets globally. The price action of the FX markets suggests that we are likely to be in for an eventful day. Fed's Bullard also said he would back interest-rate reductions if the Coronavirus develops into a worldwide pandemic. He said “…further policy rate cuts are a possibility if a global pandemic actually develops with health effects approaching the scale of ordinary influenza, but this is not the baseline case at this time.”The Pound has been underperforming the Greenback due to concerns about EU-UK trade negotiations and PM Johnson's firm stance. According to the Financial Times, the U.K. is willing to trade on the no-deals basis with the E.U. if talks fail and if the U.K. starts no-deal preparations if the pact is not clear by June. On top of that, there is consistent demand for Euros, as Euro funded positions are being forced to be unwound on a broad risk-off environment. Therefore, as long as the EUR/USD has a bid, the GBP/USD pair should not fall as well; however, the EUR/USD pair is starting to fall this morning, showing some technical damage in the charts that should keep the Euro trading below the 1.1000 handle versus the U.S. dollar. The Pound is also weaker, and the GBP/USD pair is falling 0.48 percent, trading at 1.2823.

Expected Ranges

  • USD/CAD: 1.3344 - 1.3515 ▲
  • EUR/CAD: 1.4495 - 1.4769 ▼
  • GBP/CAD: 1.7105 - 1.7250 ▼
  • AUD/CAD: 0.8716 - 0.8807 ▲
  • NZD/CAD: 0.8353 - 0.8452 ▼