When is the monthly Canadian GDP report and how could it affect USD/CAD?
Canadian Monthly GDP Overview
Friday's economic docket highlights the release of monthly Canadian GDP growth figures for the month of April, scheduled to be published at 12:30 GMT by Statistics Canada. Consensus estimates point to slower growth of 0.1% in the reported month as compared to a 0.5% increase recorded in the prior month.
According to analysts at TD Securities - “Services will benefit from a rebound in real estate although weaker retail activity will weigh on the sector. However, a 0.2% headline print should provide some comfort to policymakers concerned over global headwinds, and keep Q2 GDP tracking well above the Bank of Canada's 1.3% projection from April.”
Deviation impact on USD/CAD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction on the pair, in case of a deviation between -0.83 to +0.83, is likely to be around 18-24 pips during the first 15-minutes and could get extended to 54-57 pips in the following 4-hours.
How could it affect USD/CAD?
Ahead of the key release, the USD/CAD pair was seen oscillating in a range below the 1.3100 handle and consolidated recent heavy losses to the lowest level since early-February. Even a slightly positive reading will be enough to provide a fresh boost to the Canadian Dollar, though near-term oversold conditions might help limit the downside for the major.
Immediate support is pegged near yearly lows, around the 1.3070-65 region, below which the pair is likely to accelerate the slide further towards challenging the key 1.3000 psychological mark. Meanwhile, the reaction to mostly in line reading is likely to rather muted amid nervousness ahead of the US President Donald Trump's meeting with his Chinese counterpart Xi Jinping.
Alternatively, a weaker than expected reading might prompt some short-covering move and lift the pair back towards the 1.3155-60 supply zone, albeit any subsequent up-move seems more likely to remain capped near weekly tops, around the 1.3200 round figure mark.
Key Notes
• Canada: Industry-level GDP likely to increase 0.3% in April - TDS
• USD/CAD: Bears dominate near 20-week low, GDP data/trade talks on the spotlight
• Elliott wave Analysis: USD/CAD and OIL Facing Reversals!
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.