USD Waiting For US GDP

Yesterday’s turmoil provoked by ECB seems to fade away. Some of the Council’s members – Knot, Lautenschläger, Weidmann and Coeure – commented they were not happy with the decision. Villeroy added that the central bank made “essential step” to end QE. It will give the euro some time to take a breather. The US dollar is in a good shape today, and it is higher against its major counterparts. Yesterday the U.S. House of Representatives passed Trump’s budget blueprint. This is a big step forward on US tax reform, which may be the first one in almost 30 years. Among all the USD pairs, we should be careful of USD/CAD, since the pair has been growing for 7 days. Especially, after the Bank of Canada kept the rates unchanged on Wednesday. Actually, this was predictable but, anyways, disappointing. After two rate hikes in a row, the markets did expect another hawkish surprise. This week will end with the release of US GDP data. Given that the US data has been positive lately, there is a chance the GDP will surprise on the upside. In this case, USD/CAD may test July highs at the 1.30 area. If failed, the pair should be ready to rebound.

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