The Canadian Dollar (CAD) is experiencing slight gains against the US Dollar (USD) as the Greenback eases off recent gains. The CAD’s momentum is limited as oil barrel prices, which are Canada’s main export, also take a breather. The USD/CAD pair is relatively flat for the day, down 0.2% at its lowest point, hovering near the consolidation level of 1.3500. The CAD’s performance is largely dependent on oil prices and the broad-market US Dollar Index (DXY).
Canada’s economic data for the week is sparse, with the focus being on Friday’s Gross Domestic Product (GDP) figures for July. The forecast suggests that Canada’s GDP will only see a meager growth of 0.1% compared to the previous month’s decline of -0.2%. With limited data, oil prices and the performance of the USD will remain the primary drivers for the CAD.
Despite the CAD’s gains against the USD in September, boosted by surging oil prices, the Canadian economy’s struggle to achieve significant growth is evident. Persistent inflation has led officials from the Bank of Canada (BoC) to consistently emphasize the need for higher interest rates to curb inflation. As one of the top oil exporting countries globally, Canada heavily relies on barrel prices, which significantly impact the performance of the CAD.