USD/CAD finds temporary support below 1.4000, Canadian Q3 GDP in focus

USD/CAD finds an interim cushion near 1.3980, investors await Canadian monthly and Q3 GDP data.

The Canadian economy is estimated to have grown by 1% compared to same quarter of the precious year, slower than Q2 growth of 2.1%.

The US Dollar could rebound, given its strong fundamental outlook.

The USD/CAD pair discovers some support near 1.3980 in Friday’s European session. The Loonie pair gauges cushion as the US Dollar (USD) rebounds after posting a fresh two-week low, with the US Dollar Index (DXY) getting some buying interest near 105.60.

The Greenback faces an intense sell-off this week after rallying for almost 12 weeks as the nomination of Scott Bessent for the role of United States (US) Treasury Secretary by President-elect Donald Trump forced traders to trim so-called ‘Trump Trades’.

Bessent’s comments in his interview with the Financial Times (FT) last weekend indicated that he will focus on enacting Trump’s economic agenda without hampering geopolitical harmony. He also favored a reduction in fiscal deficit to 3% Gross Domestic Product (GDP), a scenario that won’t be inflationary for the US economy.

However, market experts are confident about the US Dollar’s outlook. Analysts at Brown Brothers Harriman said in a note, “The US dollar falls against other major currencies as end-of-month portfolio rebalancing weighs on the currency.” They added, “The more favorable US economic outlook relative to other major economies suggests the fundamental dollar uptrend is intact.”