The Canadian economy exceeded expectations in August and grew by 0.3%. This is better than +0.2% expected. Year over year, this is a growth rate of 2%, better than 1.7% expected.
The Canadian dollar enjoys this opportunity and USD/CAD drops below 1.0440.
It suffered earlier from the seemingly hawkish Fed decision. The Fed left policy unchanged and didn’t repeat the phrase about tighter financial conditions. This is more hawkish than expected. A weaker price of oil also has an impact.
The Canadian dollar suffered during October from the US government shutdown, the debt ceiling threat and the implications on the US economy. Weakness in the US economy weighs on Canada, which needs demand from its southern neighbor.
For more, see the Canadian dollar forecast.
Canada will publish the all important job data next Friday, together with the US Non-Farm Payrolls.
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