USD/CAD returns above 1.4400 despite Canadian GDP beats estimates
- USD/CAD bounces back above 1.4400 amid a strong recovery in the US Dollar.
- US Durable Goods Orders contracted by 1.1% in November, faster than estimates of 0.4%.
- The Canadian economy expanded by 0.3% in October against expectations of 0.1%.
The USD/CAD pair recovers sharply above 1.4400 in Monday’s North American session. The Loonie pair gains as the US Dollar (USD) bounces back strongly at the start of the holiday-shortened week due to Christmas Eve and Boxing Day on Wednesday and Thursday, respectively.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, jumps to near 108.20. The Greenback recovers half of Friday’s losses that were inspired by the slower-than-projected growth in the United States (US) Personal Consumption Expenditure Price Index (PCE) data for November.
Major reason behind USD’s recovery seems to be its upbeat outlook, given that Federal Reserve’s (Fed) officials have guided fewer interest rate cuts for 2025. According to the latest dot plot, officials see Federal Funds rate heading to 3.9% by the end of 2025.
On the economic front, US Durable Goods Orders for November have come in weaker-than-projected. Fresh Durable Goods Orders declined by 1.1%, faster than estimates of 0.4%. In October, fresh orders for durable goods rose by 0.8%, upwardly revised from 0.2%.
Meanwhile, the Canadian Dollar (CAD) remains weak despite better-than-projected monthly Gross Domestic Product (GDP) data for October. The Canadian economy expanded by 0.3%, faster than estimates of 0.1% and the former release of 0.2%, upwardly revised from 0.1%.