Canadian Dollar gains momentum versus the weaker US counterpart

The Canadian dollar surpasses the US dollar on Monday, but its success is inconsistent. Up until Friday’s GDP data, Canada doesn’t add much of importance to the economic calendar. The US markets are closed on Memorial Day, with low trading turnover. Due to a calm US market session, the Canadian dollar (CAD) is mixed on Monday and rising against the US dollar (USD). For the Memorial Day holiday, US markets are closed, so traders in the Canadian dollar are left to wait for important data releases and twist in the wind.0

Canada has little of note on the economic calendar early this week, and the release schedule is littered with low-impact figures until Thursday’s Canadian Current Account for the first quarter, which is expected to decline to -5.88 billion versus the previous -1.62 billion. Friday brings a fresh print of Canadian Gross Domestic Product (GDP), which is forecast to ease to a flat 0.0% MoM compared to the previous 0.2%. However, Friday’s Canadian GDP is likely to be overshadowed by key US inflation figures being released at the same time.

Canadian Dollar is gaining ground on Monday, due more to fresh weakness in safe haven currencies than any particular CAD-based bidding power. According to a StatCan flash estimate, wholesale trade in Canada likely rose 2.8% MoM in April, a welcome sign for investors fearing a potential recession in the Canadian economy.

Canadian Industrial Product Prices, due to be released on Tuesday, are expected to slow to 0.6% MoM growth from the previous 0.8%. Canadian Raw Material Price Index is also expected to recede to 3.2% MoM growth from the previous 4.7%.

Tuesday will kick off the American trading week with appearances from several key Federal Reserve policymakers will contribute further statements and remarks and this will act as a key driver of market flows.