The US dollar gained slightly versus the Canadian dollar in yesterday’s American trading session as applications for jobless benefits dropped by 35,000 in the week ending July 21 to 353,000, data from the Labor Department showed. Meanwhile, the Loonie was boosted by remarks coming from European Central Bank President Mario Draghi that the policymakers would do everything possible to preserve the single currency. In today’s American trades, the Canadian dollar is deemed to turn losses into gains versus the Greenback prior to the release of the US GDP report.
According to reports, the US economy is expected to expand at the slowest pace in the second quarter of this year, due to the weakening condition of the labor market that caused Americans to cut back on spending. The Advance GDP data scheduled for release today is deemed to show a drop of 1.5 percent, from the first quarter’s revised figure of 1.9 percent. Bumps in the economy have been manifesting in the second quarter of this year in corporate earnings reports, with majority of companies missing on the top line and some on the bottom line. According to Deutsche Bank Chief US Economist Joseph LaVorgna, the debt crisis has caused the soured sentiment of the investors toward the US economy.
For the Loonie, it is seen to continue rallying as Draghi’s statements boosted demand for higher-risk assets. As reported by Bloomberg News, Ravi Bharadwaj, Market Analyst at Western Union Business Solutions said in a telephone interview that the Loonie should be a better prospect for investors in the long term, based on Canada’s domestic economy and core growth rates. Considering these factors, a short position for the USDCAD pair is recommended in today’s American exchanges.
Article by AlgosysFx Forex Trading Solutions