CAD expects USD to decline even further

The US currency, which has little velocity, and the price of crude oil are closely tracked by the Canadian dollar. The USD/CAD pair is essentially flat for the day on Thursday, falling 0.2% at its low point, and it appears that consolidation is imminent near 1.3500. The final figures for Canada’s Gross Domestic Product round up a trading week with scant economic data.

In comparison to the previous month’s -0.2%, the Canadian GDP for July is expected to register at a pitiful 0.1%. The broad-market US Dollar Index (DXY) and oil prices are expected to continue to be the primary movers of the CAD on the charts. The USD/CAD is currently down 1.5%, with the soaring DXY winning the short-term head-to-head competition with crude oil prices. The Canadian GDP is reportedly struggling to maintain growth while inflation is still persistent.

BoC policymakers have been threatening higher interest rates as a way to intimidate inflation downward. Canada exported more over $120 billion USD worth of crude in 2022, making it the second-largest oil exporter in the world in terms of dollars. The majority of the momentum for the Canadian dollar is controlled by oil prices.