Trading the News: Canada Gross Domestic Product (GDP)
Updates to Canada’s Gross Domestic Product (GDP) report may fuel the recent appreciation in USD/CAD[1] as the economy is expected to grow 2.0% in the third-quarter of 2018 compared to the 2.9% expansion during the previous period.
Signs of easing activity may produce headwinds for the Canadian dollar[2] as it encourages the Bank of Canada (BoC) to keep the benchmark interest rate on hold at the next meeting on December 5, and Governor Stephen Poloz & Co. may endorse a wait-and-see approach ahead of 2019 as the ‘Governing Council will continue to take into account how the economy is adjusting to higher interest rates, given the elevated level of household debt.’
In turn, a marked slowdown in Canada’s growth rate may push USD/CAD closer to the 2018-high (1.3386), but an above-forecast GDP may curb the near-term advance in the dollar-loonie exchange rate as it puts pressure on the BoC to further normalize monetary policy over the coming months. Sign up and join DailyFX Currency Analyst David Song LIVE[3] for an opportunity to discuss potential trade setups!
Impact that Canada GDP report has had on USD/CAD during the previous quarter
|
Period |
Data Released |
Estimate |
Actual |
Pips Change (1 Hour post event ) |
Pips Change (End of Day post event) |
|
2Q 2018 |
08/30/2018 12:30:00 GMT |
3.1% |
2.9% |
-5 |
