USD/CAD extends its downside below 1.3670, investors await US PCE data

Source Fxstreet
Apr 25, 2024 23:10
  • USD/CAD remains on the defensive around 1.3655 on Friday amid the weaker USD. 
  • US GDP number expanded by 1.6% on an annualized basis in Q1 2024, compared to 3.4% growth in Q4 2023.
  • The weaker Canadian Retail Sales data triggered speculation that the BoC might start cutting interest rates in June. 

The USD/CAD pair extends its downside near 1.3655 on Friday during the early Asian session. The decline of the US Dollar (USD) to the two-week lows around the mid-105.00s exerts some selling pressure on the pair. Investors now shift their focus to the release of US Personal Consumption Expenditures (PCE) Price Index data, due later on Friday. 

The US economy grew at its slowest pace in nearly two years in the first quarter (Q1) of 2024 as prices rose at a faster pace, the Commerce Department revealed on Thursday. The first estimate of US Gross Domestic Product (GDP) grew by 1.6% on an annualized basis in the January-March period, compared to a 3.4% growth in Q4 2023. This reading came in below the market consensus of 2.5%. Additionally, US Personal Consumption Expenditures Prices rose at an annualized rate of 3.4% in Q1, nearly double the 1.8% pace recorded in Q4 2023. 

The weaker-than-expected GDP growth and hotter-than-expected inflation weigh on the Greenback and create a headwind for USD/CAD. The markets expect the US Federal Reserve (Fed) to begin the first rate cuts in September, with traders now pointing to just one rate cut in 2024 following the GDP data, according to the CME FedWatch tool.

On the Loonie front, the weaker Canadian Retail Sales data on Wednesday triggered speculation that the Bank of Canada (BoC) might start cutting interest rates at its next meeting in June, which might drag the Canadian Dollar (CAD) lower. Nonetheless, the rebound of crude oil prices provides some support to the CAD, as Canada is the largest crude oil exporter to the United States (US). 

USD/CAD

Overview
Today last price 1.3657
Today Daily Change -0.0046
Today Daily Change % -0.34
Today daily open 1.3703
 
Trends
Daily SMA20 1.3657
Daily SMA50 1.3579
Daily SMA100 1.3498
Daily SMA200 1.3537
 
Levels
Previous Daily High 1.3729
Previous Daily Low 1.3655
Previous Weekly High 1.3846
Previous Weekly Low 1.3724
Previous Monthly High 1.3614
Previous Monthly Low 1.342
Daily Fibonacci 38.2% 1.3701
Daily Fibonacci 61.8% 1.3683
Daily Pivot Point S1 1.3662
Daily Pivot Point S2 1.3622
Daily Pivot Point S3 1.3588
Daily Pivot Point R1 1.3737
Daily Pivot Point R2 1.377
Daily Pivot Point R3 1.3811

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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