Daily Afternoon Report 23.12.2016
The U.S. dollar rose to five-week highs against its Canadian counterpart on Today, after the release of downbeat Canadian economic growth data and as expectations for ore U.S. rate hikes next year continued to support the greenback.
Trading volumes were expected to be thin this week as traders were beginning to unwind positions ahead of the Christmas holiday.
USD/CAD hit 1.3553 during early U.S. trade, the highest since November 18; the pair subsequently consolidated at 1.3550, up 0.48%.
The pair was likely to find support at 1.3408, Thursday’s low and resistance at 1.3566, the high of November 18.
Statistics Canada said gross domestic product fell 0.3% in October, compared to expectations for a 0.1% rise.
Canada’s economy grew at a rate of 0.4% in September, up from a previous reading of 0.3%.
The commodity-related Canadian dollar was also affected by a drop in oil prices on Friday, following news of increasing output from Libya.
Meanwhile, the greenback continued to be underpinned by the Federal Reserve’s decision last week to raise interest rates by 25 basis points. The central bank also projected three more rate hikes for 2017.
The U.S. was also boosted after the Commerce Department said on Thursday that GDP grew at an annual rate of 3.5% in the three months ended September 30, up from a previous estimate of 3.2% and above expectations for a reading of 3.3%.
The loonie was lower against the euro, with EUR/CAD climbing 0.53% to 1.4150.