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A somewhat better than expected GDP report from Canada: the economy squeezed by 0.1%, better than shrinking by 0.2% that was expected. Year over year, the economy grew 2.4%.  

USD/CAD is falling to 1.2740, erasing a small portion of its recent gains. It is important to note that the US dollar is currently ticking down against other currencies as well, after riding higher so far this week.

Canada was expected to report a negative growth rate of 0.2% in January 2015 – the first publication for the new year. Growth stood on 0.3% in December (before revisions).

USD/CAD was moving on up, trading at 1.2775 towards the publication.

The Canadian dollar enjoyed the surge in oil prices following the crisis in Yemen. However, as the market’s focus moved away, oil prices fell back and so did the loonie.  While Yemen sits on the critical water passage of Bab el Mandeb, optimism about a  nuclear deal between the West and Iran is  weighing on the price of the black gold.

In addition, we are seeing a fresh surge in the US dollar in recent days. This can be attributed to improving US figures after a long losing streak as well as some end of month / end of quarter adjustments.

More:  Canadian dollar: What’s next? 4 Issues from Nomura and buying USD/CAD dips from Morgan Stanley

The chart:

USDCAD March 31 sliding from highs after good Canadian GDP report