Morning Outlook: Australian Dollar Tumbles on Lower-Than-Expected Q3 GDP; BoC Decision in Focus

Euro up vs the greenback after two straight days of losses
USD/CAD gains ahead of BoC’s monetary policy decision
AUD slides after reading lower-than-expected Q3 GDP

EUR/USD: The euro traded higher vs the greenback during an early trading session Wednesday as the latter suffered after gaining for two successive days on progress in the tax reform bill. Data released Tuesdayshowed the U.S. trade deficit increased to a nine-month high in October because of rising oil prices and the widening of America’s long-standing deficits with China and Mexico. Additionally, the Institute for Supply Management (ISM) said its non-manufacturing index fell in November, missing economists’ expectations.As of04:25GMT, the pair traded 0.13% higher at 1.1840.
GBP/USD: Britain’s pound rebounded from earlier losses against the dollar during the overnight session as investors were cautiously optimistic that a deal on opening up talks on post-Brexit trade would be reached by the end of the week. Britain said it was confident of a deal on Brexit just hours after a tentative agreement with the European Union over the Irish border was dashed by Prime Minister Theresa May’s kingmakers in Belfast. However, as of04:35GMT, GBP/USD traded 0.07% lower at 1.3434.
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Tuesday, paring some of its recent gains as stronger dollar across the board weighed on oil co-related Canadian dollar. On the data front, Canada’s hard-hit export sector showed unexpected signs of strength in October, posting the first increase since May on higher shipments to the United States while imports continued to disappoint.The data most likely came too late to influence the Bank of Canada. Analysts expect the central bank to keep interest rates unchanged when it unveils its next decisionon Wednesday. As of04:40GMT, USD/CAD traded 0.05% higher at 1.2694.
Things to watch next: Bank of Canada (BoC) is scheduled to hold its monetary policy meeting today at15:00GMT, where it is seen to remain on hold.
AUD/USD: The Aussie dollar lost ground vs its US counterpart after the country’s Q3 GDP missed market expectations, coming in at 0.6% q/q, vs consensus estimates of 0.7% q/q and down from 0.9% q/q, revised up from 0.8% q/q. The RBA remained slightly hawkish in its monetary policy meeting held yesterday, keeping the benchmark interest rate at a record low of 1.50%. As of04:55GMT, AUD/USD traded 0.39% lower at 0.7579.

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