USD/CAD remains steady near 1.3900 with US GDP data on focus

The US Dollar retreated from highs above 1.3900 against the CAD, but remains steady above 1.3885.
Investors have remained cautious on Thursday, awaiting US GDP data and more Fed speeches.
The highlight of the week is Friday's PCE Prices index release, the Fed's favorite inflation gauge.

Guillermo Alcala FXStreet

The US Dollar has been trading within a narrow range near the 1.3900 level on Thursday, with downside attempts held at 1.3885. The cautious market mood amid ongoing gei¡opolitical risks and a not-so-dovish rhetoric by Fed speakers is keeping US Dollar bears at bay for now.

The focus now is on the final reading of the US second quarter’s Gross Domestic Product, which is expected to confirm that a rebound to a 3.3% annualised growth after the 0.5% contraction seen in the first three months of the year.

Later on, another batch of Fed speakers might provide further clues about the central bank’s monetary policy plans. The highlight of the week, however, will be Friday’s Personal Consumption Expenditures (PCE) Price Index, which will be analyzed with interest for more evidence of the inflationary impact of Trump’s tariffs.

On Wednesday, San Francisco Fed President Mary Daly confirmed that the bank will have to ease its monetary policy further, but she warned that the next rate cut might take some time, as the bank needs to balance its two mandates, promoting employment and keeping inflation at low levels.

Canada’s economic docket has been thin this week, but BoC Governor, Tiff Macklem, highlighted shifts in global trade and financial flows as the main threats to Canada’s growth and warned that inflation would go up as a consequence of the trade frictions with the US

Economic Indicator

Gross Domestic Product Annualized

The real Gross Domestic Product (GDP) Annualized, released quarterly by the US Bureau of Economic Analysis, measures the value of the final goods and services produced in the United States in a given period of time. Changes in GDP are the most popular indicator of the nation’s overall economic health. The data is expressed at an annualized rate, which means that the rate has been adjusted to reflect the amount GDP would have changed over a year’s time, had it continued to grow at that specific rate. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.

Why it matters to traders?

The US Bureau of Economic Analysis (BEA) releases the Gross Domestic Product (GDP) growth on an annualized basis for each quarter. After publishing the first estimate, the BEA revises the data two more times, with the third release representing the final reading. Usually, the first estimate is the main market mover and a positive surprise is seen as a USD-positive development while a disappointing print is likely to weigh on the greenback. Market participants usually dismiss the second and third releases as they are generally not significant enough to meaningfully alter the growth picture.

Economic Indicator

Gross Domestic Product Price Index

The Gross Domestic Product (GDP) Price Index, released quarterly by the Bureau of Economic Analysis, measures the change in the prices of goods and services produced in the United States. The prices that Americans pay for imports aren’t included. Changes in the GDP price index are followed as an indicator of inflationary pressures, which may anticipate higher interest rates. A high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD moves sideways below 1.1800 on Christmas Eve

EUR/USD struggles to find direction and trades in a narrow channel below 1.1800 after posting gains for two consecutive days. Bond and stock markets in the US will open at the usual time and close early on Christmas Eve, allowing the trading action to remain subdued.

GBP/USD keeps range around 1.3500 amid quiet markets

GBP/USD keeps its range trade intact at around 1.3500 on Wednesday. The Pound Sterling holds the upper hand over the US Dollar amid pre-Christmas light trading as traders move to the sidelines heading into the holiday season.

Gold retreats from record highs, trades below $4,500

Gold retreats after setting a new record-high above $4,520 earlier in the day and trades in a tight range below $4,500 as trading volumes thin out ahead of the Christmas break. The US Dollar selling bias remains unabated on the back of dovish Fed expectations, which continues to act as a tailwind for the bullion amid persistent geopolitical risks.

Bitcoin slips below $87,000 as ETF outflows intensify, whale participation declines

Bitcoin price continues to trade around $86,770 on Wednesday, after failing to break above the $90,000 resistance. US-listed spot ETFs record an outflow of $188.64 million on Tuesday, marking the fourth consecutive day of withdrawals.

Economic outlook 2026-2027 in advanced countries: Solidity test

After a year marked by global economic resilience and ending on a note of optimism, 2026 looks promising and could be a year of solid economic performance. In our baseline scenario, we expect most of the supportive factors at work in 2025 to continue to play a role in 2026.

Avalanche struggles near $12 as Grayscale files updated form for ETF

Avalanche trades close to $12 by press time on Wednesday, extending the nearly 2% drop from the previous day. Grayscale filed an updated form to convert its Avalanche-focused Trust into an ETF with the US Securities and Exchange Commission.