USD/CAD on session lows after upbeat Canadian GDP report

US dollar slid to its lowest point against the Canadian peer on Monday, following a report showed that Canadian Gross Domestic Product increased at the fastest monthly pace in two years.

USD/CAD fell to a session low at 1.0280 at 12:26 GMT, after which consolidation followed at 1.0290, decreasing 0.14% for the day. Support was likely to be found at September 24th low, 1.0272, while resistance was to be encountered at September 27th high, 1.0331.

Earlier today it became clear that Canadian economy expanded at the fastest pace in the past two years in July, following the unexpected drop in June. This data has been supported by the recovering construction sector in the country, after the strike in Quebec, as well as by improving manufacturing activity. The Gross Domestic Product rose 0.6% to 1.58 trillion CAD in July on a monthly basis, completely making up for the 0.5% drop, recorded a month ago. Julys GDP result exceeded expectations of a 0.5% gain. Annually, Canadian economy expanded 1.4%, again above the projected 1.2% gain.

Canadian industrial production price index (IPPI) added 0.2% in August compared to July in line with projections. On the other hand, raw materials price index (RMPI) slowed down its monthly rate of increase in August, adding 0.9%, after the 4.2% increase in July. Experts, however, had anticipated a much lesser monthly climb of a 0.3%.

In the mean time, political debate in Washington over whether to continue funding President Barack Obama’s healthcare law persisted over the weekend, fueling concerns over a possible US government shutdown. There was a probability that 800 000 federal workers would be sent home on Tuesday, if the Congress fails to pass a stopgap spending bill, before funding expires tonight.

Elsewhere, the loonie, as Canadian dollar is also known, was gaining against the euro, with EUR/CAD cross down by 0.10% for the day to trade at 1.3922 at 14:07 GMT. GBP/CAD pair was falling 0.13% to trade at 1.6616 at 14:11 GMT.