USD/CAD drops to fresh 2019 lows below 1.3060 after BoC's Business Outlook Survey
- Canadian GDP expands more than expected in April.
- Bank of Canada's upbeat tone in its latest survey boosts CAD.
- US Dollar Index edges lower toward 96 amid month-end flows.
The USD/CAD pair came under a renewed selling pressure in the last hour and slumped to its lowest level since November of 2018 at 1.3057 before staging a modest rebound. As of writing, the pair was down 0.15% on a daily basis at 1.3075.
Earlier today, Statistics Canada reported that the real GDP in Canada expanded by 0.3% on a monthly basis in April following March's 0.5% reading but still came in better than the market expectation of 0.1% to provide the initial boost to the loonie.
Later in the day, the Bank of Canada in its latest Business Outlook Survey said that there was a slight improvement in the business sentiment in the second quarter and added that investment and hiring intentions remained healthy in the period. "Businesses expect increase in sales growth over next 12 months, backed by healthy domestic and foreign demand and low C$," the BoC further added in its press release to allow the CAD to gather further strength.
On the other hand, the greenback continued to weaken in the second half of the day amid month-end flows and caused the pair to continue to push lower. Although today's data showed that inflation in May, as measured by the Personal Consumption Expenditures (PCE) Price Index, came in at 1.6% on a yearly basis to match analysts' estimate, the US Dollar Index struggled to gain traction and was last down 0.12% on the day at 96.10.
Technical levels to watch for