The Canadian Dollar (CAD) fell against the US Dollar (USD) on Thursday with a price drop below 1.3200. Prices are falling after a piece of major economic news has broken. The higher low suggests that the technical bias may remain bearish considering the last upside movement printed on the graph.
The current account, which has been adversely influencing the Canadian Dollar for the last three days, was published by Statistics Canada and drops from -6.74 B to -9.84 B, according to the recorded figure.
The current account is a net stream of current transactions into and out of Canada, including products, services, and interest payments. A current account surplus shows that the flow of capital into Canada exceeds the reduction of capital. A high reading is considered positive (or bullish) for the CAD, while a low reading is considered negative (or bearish).
The Gross Domestic Product also drops sharply from 3.5% to 1.3%. While it beats the economist’s expectation, which was 1.2%.It measures the total value of all Canadian-produced goods and services. GDP is seen as a significant measure of economic development and well-being in Canada. Therefore, a downward trend has an adverse effect on the country’s economy.
Also, the BoC Interest Rate still remains the same as the last month. It reflects on the inflationary outlook of the economy and thus raises interest rates, either neutral or bullish for the CAD. Similarly, the BoC has a dovish perspective of the Canadian economy, is viewed as negative or bearish in maintaining the ongoing interest rate or reducing the interest rate.
It can be a good decision to trade USDCAD over a short period of time. Nonetheless, the chances are excellent for traders looking to trade the pair for a long-term position as the pair is heading towards the bullish trend.