Canadian Dollar declines for third day in a row, solid US GDP and Durable Goods beats to blame

• The Canadian Dollar is sinking into the lowest bids of the year as the Greenback rises.
• No economic calendar data for Canada until next Tuesday’s GDP print.
• The US Dollar is bounding higher after a thumper US GDP, Durable Goods order data reading.

The Canadian Dollar (CAD) is setting a new seven-month low against the US Dollar (USD) following a solid print for US economic data on Thursday. US Durable Goods and Gross Domestic Product (GDP) figures soundly trounced forecasts, and the Greenback is pushing higher on the headline data beats, despite a sliver of red from unemployment figures that came in worse than expected.

Canada-centric economic data is left off the calendar until next Tuesday when the latest round of Canadian GDP growth numbers come in. However, market flows are likely to be dominated by the US Federal Reserve (Fed) by that point as traders will be looking ahead to their latest rate decision and whether or not Fed Chairman Jerome Powell and company will raise rates in the face of robust growth numbers.

Daily Digest Market Movers: Canadian Dollar steps back once more as US Dollar gains

• Thursday markets are fully focused on US data beats.

• Annualized US GDP printed at a solid 4.9% for the third quarter, compared to the forecast of 4.2% and far firmer than the previous quarter’s 2.1%.
• US Durable Goods solidly thumped forecasts, coming in at 4.7% for September, shredding the 1.5% expectation and firmly rebounding from August’s -0.1% (revised down from 0.2%).
• Weak points appeared in US labor and spending data: Core Personal Consumption Expenditures (PCE) for the third quarter came in at 2.4%, below the 2.5% forecast and steepening the decline from the second quarter’s 3.7%.
• US Initial Jobless claims also rose: 210K new jobless benefits applicants were recorded for the week of October 20, more than the forecasted 208K and a step higher on the previous week’s 200K (revised upwards from 198K).
• Crude Oil is on the back foot for Thursday, sapping support for the CAD.
• USD/CAD traders will be pivoting to focus on Friday’s US Core PCE Price Index reading for September.
• The MoM PCE Price Index figure is expected to show an uptick to 0.3% in September after August’s 0.1%.

Technical Analysis: Canadian Dollar inching toward new lows for 2023 as markets broadly bid the Greenback 

The Canadian Dollar (CAD) is struggling to find a foothold against its close neighbor and currency counterpart as markets pile into the US Dollar (USD) across the board. The USD/CAD is extending Wednesday’s break of the 1.3800 handle, and the pair is now making a run at 2023’s high bid of 1.3861.

If US Dollar bulls can successfully push the USD/CAD into the 1.3900 level, that will leave the charts open for a challenge of 2022’s peaks of 1.3978 set back in October of last year.

The USD/CAD continues to trend firmly upward on the daily candlesticks with a firm pattern of higher lows and a rising trendline from July’s swing low into 1.3100.

The last meaningful swing low sits just below 1.3600, while additional technical support is coming from the 50-day Simple Moving Average (SMA) just north of that same level.

USD/CAD Daily Chart