Canadian Dollar flattens amid holiday-thinned markets

The Canadian Dollar is mostly flat near familiar territory on Thursday.
Canada GDP figures due Friday to draw some attention from Loonie traders.
Market volumes are notably thin with US markets shuttered for Thanksgiving.

Joshua Gibson FXStreet

The Canadian Dollar (CAD) traded thinly on Thursday, sticking to the 1.4000 handle against the Greenback as global markets grind into slow gear in the latter half of the trading week with overall market volumes crimped by a lack of flow from US institutions. US markets are shuttered in observation of the Thanksgiving holiday today, and a shortened day for American markets on Friday also bodes poorly for consistent market moves to wrap up the week.

Canada will be printing updates to Gross Domestic Product (GDP) growth figures on Friday, leaving Loonie traders in the lurch for Thursday. Still, Canadian Current Account figures came in better than expected, helping to muscle the CAD into a slightly higher stance on the day.

Daily digest market movers: Canadian Dollar propped up by holiday markets

The Canadian Dollar gains a scant tenth of a percent on Thanksgiving Thursday.
Market flows have dried up with the US on holiday. Friday volumes will likely be constrained as well.
Canada’s Current Account came in at -3.23 billion in the third quarter, better than the expected -9.3 billion and rebounding from the previous quarter’s revised -4.7 billion, which was initially released at -8.4 billion.
On Friday, Canada’s third quarter GDP growth is expected to ease to just 1.0% on an annualized basis, down from the previous 2.1%.
On a month-on-month basis, Canadian GDP is forecast to swing up to 0.3% MoM in September compared to August’s flat 0.0% print.

Canadian Dollar price forecast

The Canadian Dollar’s (CAD) is seeing a tepid rebound after tapping a 55-month low this week. The CAD has gained an intraday foothold against the US Dollar, dragging the USD/CAD pair back into the 1.4000 handle. The pair is still caught on the high end following a broad-market bull run in the Greenback. Still, technical traders will have an increasingly difficult time ignoring the growing potential for a cyclical turnaround in the long-term charts.

USD/CAD daily chart

Economic Indicator

Gross Domestic Product (MoM)

The Gross Domestic Product (GDP), released by Statistics Canada on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in Canada during a given period. The GDP is considered as the main measure of Canadian economic activity. The MoM reading compares economic activity in the reference month to the previous month. Generally, a high reading is seen as bullish for the Canadian Dollar (CAD), while a low reading is seen as bearish.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.