- The Canadian dollar increased by 0.7% compared to Greenback on Friday.
- Optimistic Canadian numbers of GDP growth sent Loon traders who are applying for a purchase button.
- CAD returns to the range of six months of ups.
Canadian Dollar (CAD) found some space on Friday, increased higher than the expected print in the Canadian gross domestic product (GDP) for the first quarter. The ongoing commercial confusion from the Trump administration maintained the US dollar (USD) stained near many years, giving Loon a chance to get fresh land.
The Canadian economy increased by 2.2% in the first quarter, hitting the market of market forecasts firmly and sending Loon back to the latest ups against Greenback. However, not everything is shining on the Canadian economic front: general consumer expenses slowed down in the first quarter, and the clearance hidden for the boost in both import and exports, because the companies spent most of the first quarter to exhaust the products through the door, or with the collection of goods and products before the start of the global tarp administration tariff.
Daily Digest Market Movers: Canadian Dollar Higher steps because GDP is overcoming BOC Cutne Bets
- Canadian GDP GDP increased by 2.2%, using market forecasts for 1.7%printing.
- Despite the header, Canadian GDP figurines do a indigent job, taking into account the growing cracks:
- Canadian GDP from the previous quarter was corrected much lower to 2.1% from 2.6%, and further changes should be expected;
- Real consumption expenses fell in the first quarter, but remain hidden in relation to the significant boost in both exports and imports, because enterprises were saved in front of American tariffs announced in April.
- Canadian employment data reveals the expanding gap of unemployment, especially among younger Canadians.
- The boost in the Canadian quarterly GDP rejected the plants of another rate reduction from Bank of Canada (BOC).
- The rate markets now value 80% chance of stopping the rate with the next connection of BOC.
The price of the Canadian dollar price
Fresh auction pressure strengthened the Canadian dollar to the American dollar on Friday, sending USD/CAD within a six -month range of minima south of the handle 1.3700. The price campaign still expects that daily candles towards the low side, because the continuous inheritance trend maintains offers for the bears of the trajectory.
Daily USD/CAD chart
Canadian Dollar Faq
The key factors that drive the Canadian dollar (CAD) are the level of interest rates set by Bank of Canada (BOC), oil price, the largest Canada export, economy health, inflation and commercial balance, which is the difference between the value of Canada exports compared to its import. Other factors include market moods-notterlessly from whether investors take more risky assets (risk), or are looking for unthreatening havens (risk)-risk that is positive. As the largest commercial partner, the health of the American economy is also a key factor affecting the Canadian dollar.
Bank of Canada (BOC) has a significant impact on the Canadian dollar, determining the level of interest rates that banks can borrow. This affects the level of interest rates for everyone. The main goal of BOC is to maintain inflation of 1-3% by adjusting interest rates up or down. Relatively higher interest rates are usually positive for CAD. Bank of Canada can also exploit quantitative alleviation and tightening to affect credit conditions, with former negative CAD and the second positive.
The price of oil is a key factor affecting the value of the Canadian dollar. Petroleum is the largest Canada export, so the price of oil tends to immediately affect the value of CAD. Basically, if the oil price also increases CAD, as the number of demand for currency increases. Otherwise, the price of oil will drop. Higher oil prices usually cause a greater probability of a positive trade balance, which also supports CAD.
While inflation has always been traditionally considered a negative factor of currency, because it reduces the value of money, on the contrary it was in state-of-the-art times with relaxation of cross -border capital control. Higher inflation tends to run central banks to determine interest rates, which attracts greater capital revenues of global investors looking for a lucrative place to maintain money. This increases the demand for the local currency, which in the Canadian case is the Canadian dollar.
Macroeconomic data release the health of the economy and may affect the Canadian dollar. Indicators such as GDP, PMI production and services, surveys on employment and consumer moods can affect the direction of CAD. A sturdy economy is good for the Canadian dollar. It not only attracts more foreign investment, but can encourage Bank Canada to set interest rates, which leads to a stronger currency. However, if economic data is delicate, the CAD will probably fall.
