CAD GDP: What to Expect of USD/CAD
Canadian GDP figures are due later in the NA session, with prior surveys expecting the economy to have expanded at an annualized pace of 2.9% during the first quarter, a tad higher than the initial estimates by the BoC in the April’s MPR.
According to analysts at TD Securities, the “composition of Q1 growth will reflect the familiar theme of continued momentum in the household sector (both spending and residential investment) counterbalanced by ongoing weakness in business investment. The swing factor in this report will be a rebound in exports (forecast to rise by an annualized 8.4%), which benefited from a strong Q4 handoff followed by a very solid January increase”.
Regarding the FX space, USD/CAD remains in a cautious theme ahead of more relevant US labour market figures due on Friday, with Non-farm Payrolls seen around 160K during May. That said, spot keeps navigating above the 1.3000 handle during the first half of the week following a consolidative pattern in crude oil prices and a steady-ish tone in the USD rally. Decent support is seen around last week’s lows in the 1.2900 neighbourhood, while the upper-1.3100s seems to be capping the upside.