While Canadian growth beat expectations, it isn’t enough against the greenback. Canadian Gross Domestic Product rose by 0.4% in May, better than predicted. Canada was expected to report a growth rate of 0.3% in the month of May after only 0.1% in April.
USD/CAD traded above 1.09 before the release. The Canadian dollar has been beaten hard in recent days, mostly due to the rally of the US dollar.
USD/CAD is above 1.0920. It’s almost been a one way street in USD/CAD in the past week or so: the pair moved up, stopped for a break, and continued higher. We didn’t see any meaningful correction.
The lack of direction from the Bank of Canada also weighs on the loonie. And it’s also due to the strong dollar sentiment.
Despite the nice growth number, the pair listens to the jobless claims number in the US, which was OK.
It seems that only the Canadian jobs report, due next Friday, can lift the loonie. That is, assuming it is positive.
More: Canadian dollar forecast.
Chart:
