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USD/CAD holds near early-July levels after Canada GDP stays flat
Canada’s July GDP was unchanged, ending three months of expansion, while market pricing points to a possible 25-basis-point BoC hike in December.
USD/CAD stayed supported on Tuesday, trading around 1.4187 and hovering near levels last seen in early July, according to an FXStreet market update. The pair’s tone reflected broad strength in the US Dollar as traders digested Canada’s latest growth data.
Canada’s gross domestic product was unchanged in July, matching expectations but slowing from 0.4% growth in June, which had been revised higher from 0.3%. FXStreet reported the flat reading ended three consecutive months of expansion and indicated a slow start to the third quarter, with Statistics Canada estimating the economy likely grew 0.2% in August.
FXStreet said the Canadian dollar showed little reaction to the data, as rate expectations between the Federal Reserve and the Bank of Canada, along with a widening gap between US and Canadian bond yields, remained the main headwinds. Money markets continue to price in a possible 25-basis-point BoC rate hike in December, while most economists expect the central bank to hold.