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Canadian Dollar Firmer Ahead of GDP

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Canadian Dollar Firmer Ahead of GDP

The Canadian dollar was stronger Monday, as higher risk sentiment in the global markets boosted demand for the loonie.

The Canadian dollar rose to a daily high of 0.9078 US, as demand for the greenback weakened ahead of a volatile week of trade headlined by nonfarm payrolls, GDP and the Federal Reserve’s latest policy announcement. In the morning session the loonie consolidated at 0.9068 US, up nearly 0.1 percent.

In Canada, a key GDP reading Wednesday could move the loonie, which tread water last week. Canada’s national gross domestic product expanded 0.2 percent in February, following a gain of 0.5 percent the prior month, according to a broad consensus of market analysts.

The loonie used January’s GDP reading and March’s employment report to climb to monthly highs against the US dollar. Canadian employers added 42,900 jobs in March, the government’s statistics branch reported earlier this month. The unemployment rate fell to 6.9 percent, matching the pre-recession low. The loonie subsequently broke 91 US cents for the first time since mid-February.

Aside from the key GDP reading, the Canadian data wire is relatively empty. A dearth of economic indicators in Canada could leave the loonie highly susceptible to price swings emanating from key US releases. The loonie will tumble considerably should the Federal Reserve taper bond purchases by another $10 billion this month.

On the commodity markets, West Texas Intermediate crude for June delivery climbed 0.16 percent to $100.76 a barrel.

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