USD/CAD keeps the red near multi-month lows, below 1.3100 mark post-Canadian/US data
- Canadian economic growth in April stands at 0.3% vs. 0.1% expected and 0.5% previous.
- Mostly in line/stronger US economic data underpin the USD and helped limit the downside.
- Investors now look forward to BoC’s Business Outlook Survey for some trading opportunities.
The USD/CAD pair remained depressed below the 1.3100 handle and dropped to fresh multi-month lows in reaction to upbeat Canadian GDP, though quickly recovered few pips thereafter.
Despite a subdued price action around Crude Oil prices, the commodity-linked currency - Loonie continued gaining some traction against its American counterpart and got an additional boost following the release of stronger than expected Canadian monthly GDP growth figures.
Data released on Friday showed that the Canadian economic growth for the month of April stood at 0.3%, down from 0.5% recorded in the previous month but was still better-than consensus estimates pointing to a reading of 0.1% and provided a modest lift to the domestic currency.
The downside, however, remained limited in the wake of mostly in line/stronger-than-expected US economic data, showing that the core PCE price index held steady at 1.6% yearly rate in May, while personal income growth registered a growth of 0.5% as compared to 0.3% expected.
Meanwhile, the US personal spending data matched consensus estimate of 0.4% month-on-month growth, though the previous month's reading was revised higher to 0.6% from 0.3% reported early and turned out to be one of the factors lending some support to the US Dollar.
Next in focus will be the quarterly release of the BoC's Business Outlook Survey, which might influence sentiment surrounding the Canadian Dollar and produce some meaningful trading opportunities. The key focus, however, will remain on the Trump-Xi meeting on Saturday, which might provide a fresh directional impetus.
Technical levels to watch