USD/CAD: Canadian GDP & Black Friday Shopping In Focus

The US dollar Canadian dollar exchange rate experienced very little volatility on Thursday in a quiet Thanksgiving trade. The pair traded within a tight range of just 25 points and closed the session at 1.3281 the same price that it had started at.

The dollar had a quiet session on Thursday owing to the Thanksgiving holiday. The US dollar was trading with a slight upward bias versus its peers thanks to the risk off tone to the markets.  Risk sentiment had taken a hit after President Trump signed into law the Hong Kong bill. Investors are not comfortable with the latest developments in the US — China trade dispute. Some investors fear that the move by Trump will rock the already very fragile relations between the US and China.  The risk off sentiment boosted demand for the safe haven dollar. However, by the US session investors were breathing a sigh of relief. China threaten to react but so far they have not taken any action.

Today is Black Friday, one of the biggest shopping days of the year. Investors will be watching the data released closely to gauge the health of US consumes. Strong spending is good news for the economy and inflationary pressures. Should retailers provide encouraging updates, the dollar could receive a lift.

Canadian GDP To Boost Canadian Dollar?

The Canadian dollar was under pressure in the previous European session amid weak crude oil prices on amid trade dispute concerns. However, as the US session progressed oil rebounded boosting the Canadian dollar back up to break even.

Today investors will look ahead to the release of the third quarter Canadian Gross Domestic Product. Analysts are expecting a slowdown but that would still keep annual growth within the Bank of Canada’s latest forecasts.

Unlike most of its major peers the Canadian economy remains in a heathy position, showing few signs of the impact of slowing global trade. Inflation also remains on target at 2%. Even so the BoC have said that they may start easing monetary policy despite the current strong domestic picture. The rate cut would be on the theory that risks from the trade dispute will eventually infect the domestic economy. A strong reading today could force the BoC to reconsider easing monetary policy and therefore underpin the Canadian dollar.

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