• AUD/CAD +0.8%
• USD/CAD +0.6%
• USD/CHF +0.6%

AUD/CAD

Canadian Sells Off On Lower GDP: Posting the largest percentage gainer on the day, the AUDC/AD currency cross rose convincingly past the 0.8300 and 0.8350 figures as bidders returned on less than expected gross domestic product figures from Canada.  The world's ninth largest economy posted less than consensus growth for the month of January, rising only 0.2 percent versus expectations of a 0.3 percent rise.  The lower figure, although remaining positive and expansive on last month's 0.4 percent rise, lends to mounting speculation that growth in the region may not exceed the minimum 2 percent estimated at the beginning of the year.  As a result, with lower growth potential, the Bank of Canada will more than likely opt not to raise interest rates as inflationary pressures look to come down from previous levels with the only hint of continued tightening coming from the Governor himself.  Speaking in an interview in New York, Governor David Dodge reiterated the fact that the central bank's efforts were to contain inflationary pressures within the 2 percent target set by policy officials.  Nonetheless, speculation builds of another rate hike in the economy as higher commodity prices look to contribute heavily to a final decision by central bankers.

USD/CAD

Major Action Kept Steady: Canadian dollar action was kept steady even as participation in crosses was hurt on the day.  Finding resistance at the hourly 1.1680 figure heading into the close, price action halted after speculation initially boosted the pair higher tripping stop orders along the way.  Even sustained prices in crude weren't able to help the pair as massive selling crippled benchmark stock markets.  As a result, focus looks to be turned to next week's data in firming any further direction. Setting aside three central bank announcements and a U.S. employment report, Canadian dollar traders will be privy to manufacturing data and unemployment as well.  Should data be higher, Canadian swings could be minimized as event risk looks to build into the Nonfarm payrolls report.  As a result, following the weekend, further consolidation looks probable rather than a speculated directional drive.

Rumorville: Heading into the weekend, small stops on today's longs are placed slightly below market at 1.1640/50 with further bidding below at 1.1610 should the price action pull back.  Offers are centered around 1.1690 and above with heavier interest at 1.1745/50.

USD/CHF

Dollar Data Pushes Positively: Greenback data was optimistic as several key reports lent to further confirmation that the current rate tightening bias looks to continue at least through to the May 10th meeting.  Sparking the rally looked to be reinforced personal income figures as individuals saw a rise in wages earned for the month.  This bolstered optimism, subsequently, as reflected in the final reading of the University of Michigan survey. Expected to rise to an 86.9 reading, consumers were visibly more optimistic as the survey printed an 88.9 figure.  This bolstered earlier personal spending figures and contributes to mounting speculation that the world's largest economy is still expected to churn ahead, requiring even further tightening.  With momentum traders attributed to most of the damage today, the price action looks to reflect a range next week ahead of the Nonfarm payrolls report.  Expectations are running high as sentiment may be leaning towards a less than spectacular reading on building claims in the last month.  The four week moving average, a less volatile measure, has risen above the 300,000 mark and may lend to a sub 190K print.  Comparatively, we saw a modest gain in employment as the four week moving average dipped below in the preceding month.

Richard Lee is a Currency Strategist at FXCM.