Home » USD/CAD middles after Thursday’s US PCE inflation non-starter

USD/CAD middles after Thursday’s US PCE inflation non-starter

by FX BrokerNews
  • USD/CAD softer on Thursday, moves are limited.
  • Canada saw a mixed GDP print, and US jobless claims ticked higher.
  • Friday to bring Canadian, US PMIs.

The USD/CAD ascended to a peak of 1.3597 during the day before retracing to 1.3541 following the release of the US Personal Consumption Expenditure Price Index (PCE) inflation figures, which matched market expectations. While the annualized Canadian Gross Domestic Product (GDP) exceeded projections, the month-on-month (MoM) figure fell short of expectations.

On Friday, Canada is set to release the S&P Global Manufacturing Purchasing Manager Index (PMI), coinciding with the release of the US S&P and ISM Manufacturing PMIs. Additionally, the Michigan State University’s Consumer Sentiment Index survey results are scheduled for the same day. The lineup also includes appearances by several Federal Reserve (Fed) officials, with market observers closely monitoring these events for any indications that Thursday’s PMI figures might have sparked interest in rate cuts among Fed policymakers.

Daily digest market movers: US PCE brings no surprises, mixed Canadian GDP limits moves

The US Core PCE registered at 2.8% YoY, aligning precisely with expectations and showing a slight decrease from the previous 2.9%. The month-on-month (MoM) Core PCE figure also met expectations at 0.4%, but the earlier print underwent a minor downward revision, moving from 0.2% to 0.1%.

In Canada, the Annualized Q4 GDP surpassed expectations, coming in at 1.0%, outperforming the anticipated 0.8%. This marks a robust recovery from the previous quarter’s -0.5%, which also underwent a positive revision from -1.1%.

On the US front, Initial Jobless Claims increased for the week ending February 23, reaching 215K compared to the forecasted 210K. The prior week’s figures were slightly revised from 201K to 202K. Additionally, Pending Home Sales in the US hit a five-month low, printing at -4.9% against the projected 1.0%, marking a significant pullback from the previous 5.7% (revised down from 8.3%).

Looking ahead to Friday, Canada is expected to release the latest S&P Global Manufacturing PMI for February, which previously stood at 48.3. The US ISM Manufacturing PMI for February is also anticipated to see a slight uptick to 49.5 from the previous 49.1.

Technical analysis: USD/CAD still up on the week despite Thursday backstep

USD/CAD is navigating within familiar near-term levels, retracing towards 1.3540 after an earlier decline. The pair continues to face resistance beneath this week’s peak at 1.3606, established on Wednesday. Intraday price movements find support from the nearby 200-hour Simple Moving Average (SMA) at 1.3515.

Thursday’s daily candlestick reveals a moderate trend on the upper side within recent consolidation. The pair is gradually distancing itself from the 200-day SMA at 1.3478 and has witnessed a gain of over 3% from the last significant low, reaching the 1.3200 handle.

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