The US announcing an end to tariff exemptions, which impacts Canada directly, its not a positive sign for NAFTA negotiations. If we also consider the correction in oil on the overnight session plus the fact that Canada GDP data for the first quarter missed estimates, then the correction in the loonie seems logical.
USDCAD spiked 0.6% to close around 1.2953, the economy expanded at a 1.3% annualized rate, versus 1.8% expected. This is the slowest reading in almost 2 years.
Next levels to watch for the USDCAD are 1.3050, which acted as strong resistance earlier this week, and 1.2850 on the downside.