We’ll be receiving GDP release from Canada today, and with BOC already starting its rate tightening policy, we could expect the currency market to pay attention to this release as a stronger GDP should definitely add more expectation for BOC to keep hiking rates… Here is the forecast for Canada GDP:
8:30am NY Time Canada GDP m/m Forecast 0.2% Previous 0.6%
ACTION: USD/CAD BUY -0.1% SELL 0.5%
GDP is defined (by wikipedia) as: “the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time.”
As GDP is basically the measurement of the “economy” as a whole and it certainly has a tremendous impact on the official interest rate, because better GDP equals to higher inflation, and higher inflation means higher interest rate. With CAD sold off during the past few weeks as result of strong risk aversion sentiment and general depreciation of commodities, USD/CAD now has plenty of room to strengthen if this release comes out better than expcted.
I’ll be looking to BUY USD/CAD if we get a -0.1% or lower release, and SELL USD/CAD if we get a 0.5% or higher… With Crude price on the decline over the recent disappointing economic releases in the U.S., it is possible to fee further weakness in the CAD, therefore I’ll probably look to hold on to my trades if the release also leans toward a weaker CAD.
Related posts:
- Canada GDP (Gross Domestic Product) m/m 10/30/09
- Canada GDP m/m 11/30/09
- Forex Trading Plan For UK Revised GDP q/q 08/27/10
- Canadian Core CPI Trading Plan 05/21/10
- UK Revised GDP q/q 11/25/09
- UK Final GDP q/q 03/30/2010
- UK Revised GDP q/q 02/26/2010
- Canada GDP m/m 08/31/09
- UK Revised GDP q/q 05/25/10
- How to trade Canadian Employment Change 04/09/10
