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Forex News: Canadian Dollar Higher After Better Than Expected GDP

Canadian Dollar Higher After Better Than Expected GDP Data

07/31/2019 - 10:18:00 (RTTNews)

(RTTNews) - The Canadian dollar firmed against its major counterparts in the early New York session on Wednesday, as a data showed that nation's economy expanded more than estimated in May reflected by a rebound in manufacturing sector.

Data from Statistics Canada showed that Canada's gross domestic product rose for a third consecutive month in May.

GDP rose 0.2 percent month-on-month in May following a 0.3 percent rise in April. Economists had expected a 0.1 percent rise.

Year-on-year, GDP grew 1.4 percent in May after rising 1.5 percent last month. Economists had forecast a growth of 1.3 percent.

Oil prices rose as bullish inventory data and expectations surrounding a Fed rate cut helped underpin investor sentiment.

The American Petroleum Institute on Tuesday reported a crude oil inventory draw of 6.024 million barrels for the week ending July 25, compared to analyst expectations of a 1.818-million barrel draw.

The U.S. Energy Information Administration report on crude oil inventories is due to be released later in the day.

The currency has been trading higher against its major opponents in the European session.

The loonie advanced to a 6-day high of 1.3119 versus the greenback, from a low of 1.3157 hit at 8:15 am ET. The loonie is likely to target resistance around the 1.30 region.

The Canadian currency that closed Tuesday's trading at 1.4669 against the euro appreciated to a 6-day high of 1.4623. The next possible resistance for the loonie is seen around the 1.44 mark.

Flash estimates from Eurostat showed that Eurozone consumer price inflation slowed in July, after rising in the previous month.

Headline inflation eased to 1.1 percent from 1.3 percent in June. The slowing was in line with economists' expectations.

The loonie rose back to 0.9034 against the aussie, heading to pierce a 9-year high of 0.9017 hit at 9:15 pm ET. On the upside, 0.89 is likely seen as the next resistance level for the loonie.

Data from the Australian Bureau of Statistics showed that Australia's consumer price inflation rose at a faster-than-expected rate in the second quarter on higher fuel prices.

On a quarterly basis, consumer prices gained 0.6 percent in June quarter, after remaining unchanged in the preceding quarter. Economists had expected a 0.5 percent increase.

The loonie strengthened to a 2-week high of 82.80 against the yen from Tuesday's closing value of 82.57. The loonie is seen finding resistance around the 84.00 level.

Data from the Cabinet Office showed that Japan's consumer confidence weakened to the lowest level in five-and-a-half years in June.

The consumer confidence index for households with two or more persons fell to a seasonally adjusted 37.8 in July from 38.7 in June. Economists had expected a score of 38.5.

Looking ahead, the Federal Reserve's interest rate decision is slated for release at 2:00 pm ET. Economists widely expect the central bank to cut rates to 2.00 percent - 2.25 percent.

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