Canadian Dollar Advances After Strong GDP Data

The Canadian dollar spiked up against its major counterparts in the European session on Friday, after a data showed that Canadian economy expanded more than expected in May.

Data from Statistics Canada showed that gross domestic product rose 4.5 percent on a seasonally adjusted monthly basis in May following a 11.7 percent drop in April. Economists had expected the economy to expand by 3.5 percent.

Separate data showed that prices for products manufactured in Canada rose in June, driven mainly by higher prices for energy and petroleum products.

The IPPI increased 0.4 percent in June, following a 1.2 percent increase in May. Economists had forecast a rise of 0.8 percent.

The loonie appreciated to 1.5844 against the euro, after falling to a 3-1/2-month low of 1.5979 at 2:45 am ET. The next possible resistance for the loonie is seen around the 1.56 mark.

Flash estimate from Eurostat showed that the euro area economy contracted at the fastest pace on record in the second quarter amid the coronavirus pandemic.

Gross domestic product fell 12.1 percent on a quarterly basis, bigger than the 3.6 percent drop in the first quarter. This was bigger than the economists' forecast of 11.2 percent and was the sharpest decline seen since the series began in 1995.

The loonie advanced to 78.65 against the yen, from more than a 2-month low of 77.61 seen at 12:00 am ET. On the upside, 81 is likely seen as its next resistance level.

Data from the Ministry of Economy, Trade and Industry showed that Japan industrial production rose a seasonally adjusted 2.7 percent on month in June, beating forecasts for a gain of 1.2 percent following the 8.9 percent decline in May.

That beat forecasts for a gain of 1.2 percent following the 8.9 percent decline in May.

Reversing from a 1-1/2-year low of 0.9697 set at 2:30 am ET, the loonie edged up to 0.9616 against the aussie. The loonie is likely to face resistance around the 0.94 level.

In contrast, the loonie held steady against the greenback, after having climbed to 1.3405 at 4:00 am ET. At Thursday's close, the pair was worth 1.3422.