The USD/CAD pair has been on an upward trend for the fourth day in a row, reaching around 1.3710 during the European trading session on Friday. Investors are eagerly awaiting the release of the Core PCE Price Index, which is expected to show a decrease in year-over-year inflation to 2.6% from the previous 2.8%. This particular data is closely monitored by the Federal Reserve as their preferred measure of inflation.
One of the key factors supporting the US Dollar (USD) and subsequently the USD/CAD pair is the rise in yields on US Treasury bonds. This increase in yields has led to a boost in the value of the USD, contributing to the pair’s gains. The recent expansion in the US economy has also played a role in this trend, with the Gross Domestic Product Annualized growing by 1.4% in Q1, slightly higher than the previous reading of 1.3%.
On the other side, the Canadian Dollar (CAD) is also in focus as Statistics Canada is set to release the country’s GDP (MoM) data later in the North American session. A growth rate of 0.3% is expected for April, following neutral growth in March. Additionally, the CAD is influenced by the movement of crude Oil prices, as Canada is a major exporter of Oil to the US. With West Texas Intermediate (WTI) crude Oil prices on the rise, trading near $81.90, the CAD is finding support despite the USD’s strength.
Looking at the broader economic landscape, the Gross Domestic Product (GDP) data released by Statistics Canada is a key indicator of the overall economic activity in the country. The MoM reading, which compares economic activity in the reference month to the previous month, is closely watched by investors. A higher GDP reading is typically seen as positive for the CAD, while a lower reading may have a bearish impact.
As investors navigate through these economic indicators and market movements, it is essential to conduct thorough research and analysis before making any investment decisions. The information provided here is for informational purposes only and should not be considered as financial advice. Both the risks and potential rewards of investing in open markets should be carefully weighed, as market conditions can change rapidly.
In conclusion, the USD/CAD pair’s surge above 1.3700 is a reflection of the current economic landscape, with factors such as inflation data, GDP releases, and Oil prices influencing the movement of the currency pair. Investors will continue to monitor these developments closely to make informed decisions in the ever-changing financial markets.