Canadian Dollar falls back on Tuesday amid broad-market Greenback bidding

• Canadian Dollar retreats after US morning session's risk-off jitters.
• Canada GDP prints below expectations, erodes CAD further.
• US wage growth accelerates again, crimping rate cut hopes.

The Canadian Dollar (CAD) eased against the Greenback on Tuesday after the American market session kicked the day off with a risk-off push after US wages outpaced expectations. Investors are gearing up for the US Federal Reserve's (Fed) latest rate call, slated for Wednesday. 

Canada saw a further slowing in Gross Domestic Product (GDP) figures in February, further hampering the Canadian Dollar. Declines in the Antipodeans gave the CAD a boost in Pacific markets, sending the Canadian Dollar into another mixed trading day. 

Daily digest market movers: Canadian Dollar retreats in wake of Greenback jump

• Canadian MoM GDP in February rose 0.2%, below the forecast for 0.3% and falling back from January's 0.5% (revised down from 0.6%).
• US Q1 Employment Cost Index accelerated to 1.2%, beating the forecast of 1.0% and the previous quarter's 0.9% wage growth.
• Accelerating labor costs continue to plague rate-cut-hungry markets as inflation remains above Fed targets and progress on reducing price growth has stalled.
• April's Chicago Purchasing Managers Index (PMI) eased to 37.9, the indicator's lowest print since November 2022.
• The Consumer Board's Consumer Confidence Index declined to 97.0, nearly a two-year low in aggregate consumer survey responses.
• Read more: US CB Consumer Confidence declines to 97.0 in April
• US ADP Employment Change for April will print on Wednesday, forecast to tick down to 179K from 184K.
• Fed's latest rate call and Monetary Policy Statement are scheduled for 18:00 GMT on Wednesday. Fed Chair Jerome Powell will hold a press conference 30 minutes after that.
• Fed is expected to hold rates steady, and investors will be looking for signs of firmer policy guidance from the Fed on when rate cuts could come.
• According to CME's FedWatch Tool, rate cut hopes for September have been dashed, and rate markets are pricing in 51.1% odds of no cut until the November rate meeting.

Technical analysis: Canadian Dollar mixed as broader market flows push CAD around

The Canadian Dollar is broadly mixed on Tuesday, shedding half a percent against the US Dollar (USD) and around a third of a percent against the Euro (EUR). Pacific market weakness saw the CAD climb around four-tenths of a percent against the Antipodeans.

USD/CAD broke into a fresh five-day high during Tuesday's US market session, challenging the 1.3750 region as the pair bounces from a heavy supply zone between 1.3680 and 1.3630. Bids are still down from the last swing high into 1.3845, but buyers are pushing back into chart territory north of the 200-hour Exponential Moving Average (EMA) at 1.3688.

USD/CAD hourly chart

USD/CAD daily chart