Canadian Dollar Drops Against US Dollar on Weak Canadian GDP Data

The Canadian dollar today crashed to new lows against the US dollar following the release of disappointing Canadian Q1 GDP data in the early American session. The loonie’s fall triggered a rally in the USD/CAD currency pair as investors dumped the commodity-linked loonie in favor of the greenback.
The USD/CAD currency pair today rallied from a low of 1.2815 to a high of 1.2984 following the Canadian and US releases.
The currency pair was on a downtrend from the start of today’s session to the mid-European session when it slowly started rising just before the American session. The release of the Canadian GDP growth data for the first quarter by Statistics Canada is what accelerated the pair’s rally. The Q1 GDP growth came in at an annualized 1.3%, which was much lower than the expected 1.8% growth, triggering the loonie’s down slide. The monthly GDP data came in at 0.3% bettering expectations by 0.1%, while the annualized GDP print met expectations by coming in at 2.9%, but both print’s could not reverse the loonie’s drop.
Positive releases from the US docket such as the PCE data released by the Bureau of Economic Analysis, which came in at a monthly 0.2% and an annualized 1.8% meeting expectations, also contributed to the pair’s rally. The positive initial jobless claims data released by the Department of Labor also boosted the greenback.
The currency pair’s future performance is likely to be influenced by tomorrow’s US non-farm payrolls data and the Canadian RBC Manufacturing PMI.
The USD/CAD currency pair was trading at 1.2979 as at 15:28 GMT having rallied from a low of 1.2815. The CAD/JPY currency pair was trading at 83.65 having dropped from a high of 84.97.

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