When is the Canadian GDP report and how could it affect USD/CAD?
|Canadian GDP overview
Tuesday's economic docket highlights the release of monthly Canadian GDP growth figures for March, scheduled to be published at 12:30 GMT. Statistics Canada will also release the annualized quarterly growth rate, making this event more significant than the ones including only monthly data. Consensus estimates suggest that the economy expanded by 1.0% during the reported month and 6.7% annualized pace during the first quarter of 2021.
How could it affect USD/CAD?
A strong report will stoke confidence in the country’s resilience to the containment measures. This, along with the ongoing bullish run in crude oil prices, should underpin the commodity-linked loonie and continue exerting downward pressure on the USD/CAD pair. Ahead of the key release, the pair drifted back closer to multi-year lows and was further pressured by sustained US dollar selling bias. A subsequent break below the key 1.2000 psychological mark has the potential to drag the pair further towards May 2015 swing lows, around the 1.1920 region.
Conversely, any short-covering bounce led by softer readings might still be seen as a selling opportunity near the 1.2065-70 region. This, in turn, should cap the pair around the 1.2100 mark. That said, some follow-through buying might trigger some near-term short-covering move and push the pair further towards the 1.2135-40 supply zone.
Key Notes
• USD/CAD Weekly Forecast: Waiting for the catalyst?
• USD/CAD to end thoughts of a correction higher once below 1.2012/00 – Credit Suisse
• USD/CAD analysis: Breakout occurs
About the Canadian GDP
The Gross Domestic Product released by Statistics Canada is a measure of the total value of all goods and services produced by Canada. The GDP is considered a broad measure of Canadian economic activity and health. Generally speaking, a rising trend has a positive effect on the CAD, while a falling trend is seen as negative (or bearish) for the CAD.
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