USD/CAD softens to near 1.4000, eyes on Canadian GDP data

USD/CAD trades in negative territory for the third consecutive day around 1.4010 in Friday’s early Asian session. 

The weakness in the US Dollar (USD) weighs on the pair, but potential downside seems limited. 

Canada’s Q3 GDP growth report will be in the spotlight on Friday.

The USD/CAD pair extends its downside to near 1.4010 during the early Asian session on Friday, pressured by the weakening of the US Dollar (USD) after the holiday-thinned market. All eyes will be on Canada’s Gross Domestic Product (GDP) growth number for the third quarter (Q3), which is due later on Friday. 

The Greenback edges lower due to the month-end flows and some profit-taking for the US long weekend. Nonetheless, the cautious stance of the US Federal Reserve (Fed) might help limit the USD’s losses. The FOMC Minutes released on Tuesday showed that Fed officials see interest rate cuts ahead but at a gradual pace as inflation eases and the labor market remains strong. 

On the Loonie front, traders brace for Canada’s third-quarter GDP growth, which is expected to grow 1.0% on an annualized basis in Q3, compared to the previous reading of 2.1%. On a monthly basis, Canadian GDP is estimated to expand 0.3% MoM in September, compared to August’s flat 0.0% print.