Canadian GDP Shrinks – USD/CAD Battles With Parity
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Canadian GDP Shrinks – USD/CAD Battles With Parity

The Canadian economy disappointed in August and squeezed by 0.1%. Expectations stood on another month of steady growth of 0.2%.  

The disappointing figure sent USD/CAD to a second battle with parity this week. Will it stay above the line this time?

Canada’s economy enjoyed 5 consecutive months of steady growth. This country publishes GDP numbers on a monthly basis, rather than a quarterly one like many other countries.

USDCAD Parity after Weak Canadian GDP October 31 2012
USDCAD Parity after Weak Canadian GDP – Click to enlarge

Worries about the economy’s resilience were heard more recently, whether focusing on the real estate bubble or on the impact from the global slowdown. The central bank has been much less hawkish than normal, and with this figure, there’s a good reason.

USD/CAD already battled with parity earlier in the week, reaching 1.019. It then drifted downwards, but bounced off 0.9950 before climbing back. The pair trades at 1.0002 at the time of writing. This very round number has been a line of struggle in the past as well.

Further resistance is at 1.0033. For more on the loonie, see the Canadian dollar forecast.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.