The Canadian dollar has remained stable in the past few trading days, but there could be some movement today with the release of Canada’s GDP report. Currently, USD/CAD is trading at 1.4005, showing a decrease of 0.27%. With no major US events happening today and US markets closing early for the Thanksgiving weekend, all eyes are on Canada’s GDP data.
Expectations for Canada’s GDP indicate a potential rise of 0.3% for the month of September. After a stagnant growth in August, this positive growth forecast is a hopeful sign for the Canadian economy. The high borrowing costs have been weighing down on the economy, with interest rates remaining at 3.75%. This has led to a decrease in business activity and consumer demand, despite recent cuts by the Bank of Canada.
The Bank of Canada is closely monitoring the GDP release, as a lower-than-expected result could prompt the central bank to make another 50 basis points cut. This would be the second consecutive cut, with the next rate announcement scheduled for December 11 and the employment report on December 6 also being significant events to watch.
In addition to inflation and economic health, the depreciation of the Canadian dollar is a concern for BoC policymakers. The currency has dropped over 4% since October 1, and the central bank aims to avoid further depreciation. A significant rate cut could potentially lead to a sharp decline in the Canadian dollar value.
On the technical side, USD/CAD is currently testing support at 1.3995, with further support at 1.3976. Resistance levels are at 1.4019 and 1.4038. These technical indicators provide insight into potential market movements and trading opportunities for investors.
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