The USD/CAD currency pair deflated from its bullish trend after the release of GDP figures for December by Statistics Canada earlier today. However, this was a temporary move given the prevailing positive market sentiment towards the US dollar as investors price-in the possibility of a Fed rate hike in March.
The currency pair had gained close to 40 points as at the time of writing and the slight deflation was hardly traceable as it was eclipsed by the currency pair’s overall bullish trend.
The currency pairs temporary deflation was triggered by the release of GDP data, which indicated that the Canadian economy had expanded by 0.6% in the fourth quarter for an annualized figure of 2.6%, beating expectations set at 2.0%. However, the deflation was short-lived as the US dollar rallied higher as evidenced by the US Dollar Index hitting a daily high of 102.19 due to positive market sentiment towards the greenback.
The performance of the currency pair was also affected by US initial jobless claims report, released by the Department of Labor, which were better than expected at 223,000 versus the expected figure of 243,000. The higher-than-expected continuing jobless claims report also affected the currency pair.
The release of the US ISM Non-manufacturing composite for February and Janet Yellen‘s economic outlook speech in Chicago, both scheduled for tomorrow, are likely to influence the future performance of the currency pair.
The USD/CAD pair was trading at 1.3384 as at 16:44 GMT having opened the day’s session trading at 1.3340. The AUD/CAD was trading at 1.0137 having opened the day’s session at 1.0228.
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