Dollar Extends Losses Vs Loonie, U.S. Non-farm Payrolls Highly Awaited
The U.S. dollar extended its slump versus the Canadian dollar on Friday, depressed by tepid U.S. economic data released on Thursday that cast doubts on the future of the Federal Reserve’s rate hike path. Meanwhile, the Loonie has been supported by upbeat data that showed Canada’s economy grew more than expected in June.
The pair USDCAD was down 0.21 percent further after having tumbler more than 1 percent in the previous session. The dollar edged down broadly against its major developed peers after Thursday’s data showed U.S. consumer spending rose slightly less than expected in July.
According to the U.S. Bureau of Economic Analysis, domestic consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased only 0.3 percent last month after a revised 0.2 percent gain in June. Analysts had expected consumer spending to have risen 0.4 percent in July.
The report was released simultaneously with data on personal consumption expenditures (PCE) price index excluding food and energy. The so-called core PCE price index was said to tick 0.1 percent higher in July, which sent the annual inflation rate lower to 1.4 percent, the smallest gain since December 2015. The rate, which is the Fed’s preferred inflation measure, has declined by 0.5 percent since February.
Meanwhile, U.S. pending home sales unexpectedly fell in July, marking the fourth decrease in the last five months. Data released by the National Association of Realtors on Thursday showed that pending home sales Index declined by 0.8 percent to 109.1 in July. June’s reading was revised slightly lower to a reading of 110.0.
By contrast, reported published by the Statistics Canada indicated that Canada’s economy grew more than expected last quarter. Canada’s gross domestic product (GDP) was reported to rise 0.3% in June from a month earlier after expanding at the rate of 0.6 percent in the prior month. On a quarterly basis, Canada’s economy grew by 4.5% in the three-month period to June, smashing expectations calling for a growth rate of 3.7%.
Later in the day, the U.S. Labor Department will release its August nonfarm payrolls report at on Friday amid expectations that the data will show jobs growth of 180,000 in August, following an increase of 209,000 last month. The unemployment rate forecast to hold steady at 4.3% while average hourly earnings are expected to rise 0.2% after adding 0.3% a month earlier.
Sell Stop at 1.24550, Take profit at 1.24150, Stop loss at 1.24700