Canadian Dollar Advances After Strong GDP Data
July 31 2020 - 6:38AM
RTTF2
The Canadian dollar spiked up against its major counterparts in
the European session on Friday, after a data showed that Canadian
economy expanded more than expected in May.
Data from Statistics Canada showed that gross domestic product
rose 4.5 percent on a seasonally adjusted monthly basis in May
following a 11.7 percent drop in April. Economists had expected the
economy to expand by 3.5 percent.
Separate data showed that prices for products manufactured in
Canada rose in June, driven mainly by higher prices for energy and
petroleum products.
The IPPI increased 0.4 percent in June, following a 1.2 percent
increase in May. Economists had forecast a rise of 0.8 percent.
The loonie appreciated to 1.5844 against the euro, after falling
to a 3-1/2-month low of 1.5979 at 2:45 am ET. The next possible
resistance for the loonie is seen around the 1.56 mark.
Flash estimate from Eurostat showed that the euro area economy
contracted at the fastest pace on record in the second quarter amid
the coronavirus pandemic.
Gross domestic product fell 12.1 percent on a quarterly basis,
bigger than the 3.6 percent drop in the first quarter. This was
bigger than the economists' forecast of 11.2 percent and was the
sharpest decline seen since the series began in 1995.
The loonie advanced to 78.65 against the yen, from more than a
2-month low of 77.61 seen at 12:00 am ET. On the upside, 81 is
likely seen as its next resistance level.
Data from the Ministry of Economy, Trade and Industry showed
that Japan industrial production rose a seasonally adjusted 2.7
percent on month in June, beating forecasts for a gain of 1.2
percent following the 8.9 percent decline in May.
That beat forecasts for a gain of 1.2 percent following the 8.9
percent decline in May.
Reversing from a 1-1/2-year low of 0.9697 set at 2:30 am ET, the
loonie edged up to 0.9616 against the aussie. The loonie is likely
to face resistance around the 0.94 level.
In contrast, the loonie held steady against the greenback, after
having climbed to 1.3405 at 4:00 am ET. At Thursday's close, the
pair was worth 1.3422.
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