8:30am (NY Time) CA GDP m/m Forecast 0.1% Previous 0.0%
ACTION: USD/CAD SELL 0.4% BUY -0.2%
We’ll be focusing on the Canadian GDP month on month release, which is defined (from 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.” GDP has a strong effect on the cash rate of the CAD, as better economy affects BOC’s rate outlook and future monetary policy.
We are looking for a +0.4% (or better) or a 0.1% (or worse) of actual release figure based on the expected 0.1%. If we do get a 0.4% on the monthly GDP, it would be Canadian Dollar positive and we should look for entries to SELL USD/CAD; if we get a -0.2% release, then we should consider BUYING USD/CAD.
Canadian Dollar has been under pressure lately as USD gained across the board since last week; however, with better than expected GDP release from U.S. yesterday, we could see further weakness in the CAD if we do not also have a surprising release number to the upside. Expect to either go LONG on the USD/CAD or wait for better entries on a LONG order… Unless this release totally blows the US GDP release out of water, the dynamic of USD/CAD pair should remain in an upward trend.
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