CAD Rebounds as Canada's Economy Surpasses Expectations, USD/CAD Hits Resistance
Scotiabank analysts predicted Canada's economy would rebound after a weak start to the year, and that prediction came true. Statistics Canada reported on August 25th that real GDP expanded 0.8% quarter-on-quarter in Q2, equivalent to an annualised 3.3%, the fastest pace since 2023.
The Canadian Dollar barely budged at this news, but the US Dollar to Canadian Dollar (USD/CAD) exchange rate rose towards 1.3908 due to comments from Kevin Warsh at Jackson Hole that drove the broader US Dollar higher and lifted expectations for a September Fed rate increase.
Scotiabank's fair-value model suggests the USD/CAD exchange rate has little reason to move dramatically away from the high-1.38s, with Friday's close at 1.3903 leaving the pair only modestly above that estimate.