USD/CAD has been declining since October last year, with highs getting lower, although now we are seeing signs that the retreat might be over. Crude O
USD/CAD has been declining since October last year, with highs getting lower, although now we are seeing signs that the retreat might be over. Crude Oil has been supporting the CAD, which has benefited from a positive risk sentiment.
The commodity dollars hve also been benefiting from positive risk sentiment, as some fundamentals are showing improvement in the US, while we have heard promisses from China’s Politbeaurow about monetary and fiscal aid to help revive the economy. That improved the sentiment massively for commodities, commodity dollars and stock market, which have been making gains for around three straight weeks.
Although, we are seeing some bullish reversing signs in USD/CAD, as the USD also makes a comeback, after the positive US GDP and employment report this past week. The US GDP showed a 2.4% expnasion in Q2, against 1.8% expected, while lower jobless claims showed that the labour market is tightening further. The Canadian GDP did show a 0.3% expansion for May, but that’s history and June is expected to show a 0.2% contraction. So, both technicals and fundamentals are in line for a bullish reversal.
May 2023 Canadian GDP data
- May GDP 0.3% versus 0.3% expected
- Prior month 0.0% revise to +0.1%
- Canada GDP for May +0.3% versus +0.3% expected
- Goods producing industries -0.3%
- Service producing industries +0.5%
- 12 of 20 industrial sectors posted increases
For the month of June ahead the projection shows:
- Advanced GDP estimate for June -0.2%
May GDP was aided by a rebound in wholesale and public administration; the latter boosted by the end of a government strike in April. However there was a drag from the oil and gas industry as companies curtailed operations due to forest fires.
That reversed in June but wasn’t enough to keep GDP positive due to softness in wholesale trade and manufacturing.
USD/CAD Live Chart
USD/CAD
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