USD/CAD hits 4-week highs at 1.2540 and retreats

USD/CAD rose further during the American session and printed a fresh 4-week high at 1.2530. It pulled back and at the moment is hovering around 1.2500. 

The pair soared earlier today after the release of the Canadian GDP data. The economy stagnated in July; market consensus pointed to a monthly expansion of 0.1%. US data had no significant impact on the pair. The most important US report today was personal income and spending that rose in line with expectations 0.2% and 0.1%, respectively. Inflation indicators measured by the core PCE rose less than expected, 1.3% y/y, weakening the greenback. 

Despite the retreat of the US dollar in the market, USD/CAD continued to rise as analysts drop back on tightening expectations from the Bank of Canada. 

CAD: Bad week, great quarter 

Friday’s decline extended weekly losses of the Loonie that is about to finish the week sharply lower against the US Dollar. USD/CAD is up 1.35% from the level it had a week ago. 

During the last three weeks, the pair has been moving with a bullish bias, recovering after bottoming at 1.2060 back on September 8. The main trend still points to the downside, although the bullish correction has intensified. 

Despite the reversal of the last weeks, the CAD is still among the best performers of the third quarter.