When is the monthly Canadian GDP report and how could it affect USD/CAD?
Canadian Monthly GDP Overview
Wednesday's economic docket highlights the release of monthly Canadian GDP growth figures for the month of May, scheduled to be published at 12:30 GMT by Statistics Canada. Consensus estimates point to a further deceleration in the monthly growth rate to 0.1% as compared to the previous month's reading of 0.3%.
However, analysts at TD Securities are looking for a rise by 0.2% in May and wrote - “Services should see a more subdued performance owing to a sharp pullback in wholesale trade, although a 0.2% increase would still leave Q2 tracking well above trend (1.8%) and BoC projections (2.3%).”
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 USD/CAD pair, in case of a deviation between +0.83 to -0.83, is likely to be around 34-52 pips during the first 15-minutes and could get extended to 72-85 pips in the following 4-hours.
How could it affect USD/CAD?
Ahead of the key release, the pair was seen recovering from weekly lows and was last seen trading around mid-1.3100s. A slight disappointment will be enough to assist the pair to build on its steady intraday climb and aim towards conquering the 1.3200 round figure mark.
Alternatively, a stronger reading might exert some additional pressure and drag the pair further towards the 1.3115 support area, albeit the downside is likely to remain cushioned ahead of the highly anticipated FOMC monetary policy decision, scheduled later during the US trading session.
Key Notes
• Canada: GDP growth projected to slow to 0.2% in May - TDS
• USD/CAD struggles near weekly lows, focus on Canadian GDP/FOMC
• USD/CAD technical analysis: Buyers attempt comeback from 4H 200MA, multi-day old support-line
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.