The Canadian economy unexpectedly contracted by 0.1% in the month of September , concluding a very weak third quarter. USD/CAD rises on this news and is at a monthly high.
Early expectations stood on a growth rate of 0.1% in September, following a growth rate of 0.3% in August and a contraction of 0.1% in July. All in all, the Canadian economy stalled in the third quarter, even though the US economy grew at that time.
US weakness in the second quarter turned into Canadian weakness in the third quarter. Recent rises in oil prices should help Canada have a better fourth quarter.
USD/CAD is now at 1.0280, after breaking the resistance line of 1.0265 that was the upper border of a recent 1.0070 to 1.0265 range. The disappointing release sent it 50 pips higher. Above this level, the next resistance line is at 1.0380, followed by 1.05. Below 1.0070, the next support line is parity.
See the Canadian dollar forecast for more technical levels and analysis.
On Friday, Canadian job figures will be released and they will rock USD/CAD as well. They are published just before the US Non-Farm Payrolls, providing lots of action for all currencies.
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