Canadian monthly GDP overview
Tuesday's economic docket highlights the release of monthly Canadian GDP growth figures for January, scheduled to be published at 12:30 GMT by Statistics Canada. Consensus estimates point to a modest 0.1% growth during the reported month as compared to a 0.3% increase recorded in December.
How could it affect USD/CAD?
The recent action has been exclusively driven by developments surrounding the coronavirus saga and oil price dynamics. Given that the data pertains to a period before the coronavirus crisis and a massive fall in crude oil prices, the market reaction should be limited and fail to provide any meaningful impetus to major.
Meanwhile, the pair added to the overnight strong gains and scaled higher for the second consecutive session on Tuesday amid resurgent USD demand. Any disappointment might be enough to provide an additional boost and lift the pair further beyond the 1.4300 round-figure mark, towards testing its next major hurdle near the 1.4340-50 region.
Conversely, a stronger reading might extend some support to the commodity-linked currency – the loonie – amid a strong recovery in crude oil prices. However, any meaningful pullback might still be seen as a buying opportunity and is more likely to be short-lived.
Key Notes
• USD/CAD rallies to multi-day tops, further beyond 1.4200 mark
• USD/CAD analysis: Targets at 1.4350
About monthly 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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