Canadian Dollar Gets a Boost in Forex Trading

Canadian dollar is getting a boost today in forex trading, receiving some help from disappointing US economic data. Indeed, a lot of the loonie’s gains today are coming as a result of disappointing news, and less about solid advances made by the Canadian currency.

US GDP data for Quarter 1 came in below expectations. Analysts had expected an annualized rate of 2.7 percent, but instead saw 2.2 percent. The disappointment is an indication that economic growth in the United States is slowing. Given that the Federal Reserve policy statement indicated that Ben Bernanke and company are ready to engage in more quantitative easing if necessary, this slowing economic growth is  seen as a possibility of more easing.
The result is that the loonie is getting a boost against the greenback. Canadian dollar is seeing improvement right now as US dollar sentiment fall back. Even though oil prices are retreating a bit, the loonie still maintains the upper hand against the greenback. For now, Canada’s economy is seen as more ready for growth (some expect the Bank of Canada to raise interest rates soon), and that is translating into gains for the loonie.
At 13:46 GMT USD/CAD is lower at 0.9808, down from the open at 0.9845. GBP/CAD was lower earlier, but has gained and is up to 1.5942 from the open at 1.5935.


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