The Canadian dollar today rallied against its US counterpart after the release of positive Canadian GDP growth data for the month of May by Statistics Canada. The US Bureau of Economic Analysis also released the US GDP growth estimate for the second quarter, which disappointed, causing the US dollar to weaken against the Canadian dollar.
The USD/CAD currency pair lost over 100 points at the height of its decline as the US dollar retraced all its gains against the Canadian dollar made during yesterday’s session.
According to the Statistics Canada report, Canada’s real GDP grew by 0.6% in May as compared to February’s 0.2% growth, which was also the expected figure. The GDP growth was attributed to significant growth in 14 out of 20 industrial sectors in Canada. The year-on-year growth was reported at 4.6% versus the expected 4.2%, which also contributed to the loonie’s rally against the greenback.
Moreover, the US dollar weakened against the Canadian dollar as the US GDP growth estimate for the second quarter missed expectations. The second quarter GDP growth was reported at an annualized figure of 2.6% versus the expected 2.7%. The US personal consumption expenditure index was worse than expected as it recorded a 0.3% increase in the second quarter as compared to a 2.2% increase in the first quarter.
The loonie’s future performance is likely to be affected by global oil prices and the release of Canada’s raw materials price index on Monday.
The USD/CAD currency pair was trading at 1.2433 as at 16:05 GMT having dropped from a daily high of 1.2567. The CAD/JPY was trading at 89.14 having rallied from a low of 88.31 earlier today.
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