- USD/CAD resumes upside despite upbeat Canadian GDP data.
- US dollar recovers from correction as US yields move higher.
- Consumer income and spending data from the US surpass expectations.
The USD/CAD printed fresh daily highs on Friday during the American session above 1.2800. It rebounded from three-day lows it hit earlier after Canadian data at 1.2718.
Dollar surges again
On Friday, the greenback was correcting lower across the board, but it turned to the upside, particularly against commodity currencies. The DXY is still down for the day, but now by 0.45%, off lows.
The US dollar started to recover after the personal consumption and personal spending report that showed larger-than-expected increases. The same report showed no surprises in the Core PCE. The Chicago PMI dropped from 62.9 to 58.5 and the Consumer Sentiment Index from the University of Michigan declined to 65.2.
The USD/CAD bottomed after Canadian GDP data showed an increase of 1.1% in February, above the 0.8% of market consensus. “With February’s upside surprise and solid flash estimate for March, Q1 GDP is now tracking well above BoC projections at 5.6%. This will add more pressure for the Bank to return policy to neutral, and while we continue to see a high bar for 75bps, we look for a 50bp hike in June and July”, said analysts at TD Securities.
Later in the day, USD/CAD bounced to the upside on the dollar’s strength and printed a fresh daily high at 1.2820. The pair is hovering around 1.2800, headed toward the fifth weekly gain in a row.