The USD/CAD currency pair is currently trading near its three-month peak of 1.3940, a level reached earlier this week. As of Thursday’s European trading session, the pair is hovering around 1.3920. The recent strength of the US Dollar can largely be attributed to ongoing market caution, especially in light of uncertainty surrounding the upcoming US presidential election. Traders are now set to analyze key economic indicators, including the US Personal Consumption Expenditures (PCE) Price Index and Canada’s Gross Domestic Product (GDP), both due for release on Thursday.
The latest data revealed that the US GDP grew by an annualized rate of 2.8% in the third quarter, falling short of the second quarter’s growth of 3.0% and missing the market predictions for the same growth figure. Despite this underwhelming growth report, a more encouraging sign came from the ADP Employment Change data, which indicated that US private sector businesses added 233,000 jobs in October, the highest monthly increase since July 2023. This figure exceeded expectations significantly, following a revised increase of 159,000 jobs in September.
Meanwhile, the Canadian Dollar may be benefiting from rising oil prices, supported by Canada’s status as the leading crude supplier to the US. The optimism surrounding US fuel demand has contributed to this surge, particularly after reports indicated an unexpected decline in crude inventories. At the current moment, West Texas Intermediate (WTI) crude oil is priced around $68.70.
Additionally, the US Energy Information Administration (EIA) reported a decrease in crude oil stockpiles by 0.515 million barrels for the week ending on October 25. This drop was contrary to market forecasts, which had anticipated a substantial increase of 2.3 million barrels. As these economic elements continue to develop, further insights into the direction of both the USD and CAD likely hinge on upcoming releases and ongoing market sentiment.
