When is the Canadian GDP report and how could it affect USD/CAD?

Canadian GDP overview

Friday's economic docket highlights the release of monthly Canadian GDP growth figures for December, scheduled to be published at 13:30 GMT. Statistics Canada will also release the annualized quarterly growth rate, making this event more significant than the ones including only monthly data. Consensus estimates point to a flat m/m reading and 1.2% annualize growth rate during the last quarter of 2018, indicating further deceleration from 2.0% growth recorded in the previous quarter. 

Mario Blascak, FXStreet's own European Chief Analyst commented on the upcoming macro data and writes: “Even with the growth rate slowing down to 1.2%, for the Bank of Canada policymakers, the Canadian economy still operates close to full capacity when overlooking the temporary slowdown effects. After hiking the target rate three times in 2018, the Bank of Canada is still expected to move gradually towards 2.5%-3.5% neutral rate range.”

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 +0.82 to -0.82, is likely to be around 40-pips during the first 15-minutes and could get extended to 84-86 pips in the following 4-hours. 

How could it affect USD/CAD?

Ahead of the key release, the pair was seen struggling near the lower end of its weekly trading range, just below mid-1.3100s, and a surprisingly stronger reading might turn the pair vulnerable to break through the 1.3100 handle and aim towards challenging Jan. swing lows, around the 1.3070-65 region.

Alternatively, a weaker reading might trigger some short-covering bounce, albeit the prevailing bullish sentiment might continue to underpin the commodity-linked currency - Loonie and keep a lid on any meaningful up-move near the overnight swing higher, around the 1.3200-1.3210 region. 

Key Notes

   •  Canada GDP Preview: Canadian GDP is expected to decelerate with slowdown seen temporary

   •  USD/CAD weakens farther below mid-1.3100s, breaks below overnight swing low

About the Canada 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.