Canada GDP surged 0.6% in January, much better than expected and well above the most optimistic scenario (median 0.2%) following the 0.2% gain in December. This is the fourth straight monthly gain. The acceleration in January was driven by manufacturing ( 1.9%), retail trade ( 1.5%), and mining, quarrying, and oil and gas extraction ( 0.9%). Utility production rebounded 2.7% in January on a return to more seasonal weather after the 2.5% drop in December that was due to unseasonably warm conditions. By sector, goods producing industries jumped 1.2% in January after the 0.3% gain in December. Service producers expanded 0.4% in January after an 0.2% gain in December. This is a strong report that underpins the view that Canada’s economy is adjusting to the lower commodity/oil price environment. Moreover, the big gain in January GDP improves the prospects for Q1 GDP.
USD-CAD fell to new five-plus month lows of 1.2882 in the aftermath of the much better than expected January Canada GDP outcome. The October 15 low of 1.2833 becomes the next downside target, with a break there taking the pairing to eight-month low territory. Oil prices will need to head higher again however, if further USD-CAD losses are to be seen. Short term resistance at 1.30958 10 Day MA and then 1.3219-1.3260.
Always trade with strict risk management and remember that your capital is the single most important financial aspect of your trading business.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:
Senior Currency Strategist
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Please note that times displayed based on local time zone and are from time of writing this report.
Click here to access the full HotForex Economic calendar.