Canadian Dollar Surges Against US Peer, Later falls on GDP Data

The Canadian dollar today surged against its US peer as the latter eas reeling from yesterday’s speech by the Fed Chair Jerome Powell, which unveiled a new inflation policy. The USD/CAD currency pair today fell for the fourth consecutive session to lows last seen in January as the greenback remained under intense selling pressure.
The USD/CAD currency pair today fell from an opening high of 1.3132 during the Australian session to a low of 1.3047 in the early American market before recouping part of its losses.
The weak greenback fueled the currency pair’s decline after Jerome Powell’s speech unveiling a new inflation policy triggered an exodus out of the dollar. The commodity-linked loonie was barely affected by the range-bound crude oil prices as tracked by the West Texas Intermediate. The pair recouped its losses after the release of Canada’s Q2 GDP report, which was slightly better than expected. According to Statistics Canada, the country’s GDP contracted 38.7% versus the expected 39.6% decline.
Several macro releases from the American docket also boosted the pair, including the mixed US personal consumption expenditures report. According to the Bureau of Economic Analysis, the core US PCE print came in at 1.3% versus the expected 1.2%. The upbeat University of Michigan consumer sentiment index for August also contributed to the pair’s recovery.
The currency pair’s performance over the upcoming weekend is likely to be affected by crude oil prices and US dollar dynamics.
The USD/CAD currency pair was trading at 1.3096 as at 14:46 GMT, having risen from a low of 1.3047. The CAD/JPY currency pair was trading at 80.42, having fallen from a high of 81.58.
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