USD/CAD has been trading in an ascending channel, but this week the range has been tight. However, Canada’s GDP report is inducing some life into this pair, together with the economic data released from the US at the same time, with the CAD fining some bids after the positive reading, sending USD/CAD lower.

USD/CAD Daily Chart – The Price Still Remains in the Ascending Channel

Today’s Canadian GDP data was expected to reveal a 0.4% increase in January compared to December. This growth projection would be a nice jump in the Canadian economy starting 2024, after some mild readings in the previous several months. However, there is a risk that if the GDP data falls slightly short of expectations, it could potentially prompt a breakout of the USD/CAD  from its current trading range. A weaker-than-expected GDP figure would exert downward pressure on the Canadian dollar (CAD) against the US dollar (USD), leading to a potential shift in the USD-CAD exchange rate.

January 2024 GDP from Statistics Canada

Regarding monetary policy, market forecasts indicate that the Canadian central bank will likely maintain its benchmark interest rate at a 22-year high of 5% during its policy decision on April 10. However, there is speculation that the central bank could initiate a rate-cutting campaign in June. The anticipation of a potential rate-cutting campaign in June could influence market sentiment and trading dynamics for the CAD, but today’s jump in the GDP numbers is actually helping the CAD, as the price retreats from the top of the channel.

USD/CAD Live Chart