Canadian dollar should enjoy good GDP
Posted on October 29, 2009 by Yohay
Filed Under Forex Opinions | 11 Comments
After being blown away from parity following the rate decision, Canada’s monthly GDP might help the Canadian dollar. The good GDP release in the US could signal that also Canada’s GDP is will be on the bright. Here’s a preview for the Canadian GDP.
Canada publishes its monthly GDP on Friday at 12:30 GMT. Canada is unique in publishing a monthly GDP, but it’s published late – 2 months after the month ended. Tomorrow’s GDP is for the month of August, in the middle of the third quarter.
After 10 consecutive months of falling, Canadian GDP rose in June by 0.1%. July followed with an unchanged number. The slow recovery was quite disappointing one month ago. This time, economists expect a 0.1% rise once again.
Today’s American Advance GDP for the whole third quarter was very good. It rose by 3.5% (annualized) exceeding expectations. America is out of recession. This ignited risk appetite, and also helped the Canadian dollar gain against the US dollar.
It also raised the hopes for a positive GDP in Canada. The Canadian economy is very dependent on the American one. Growth in the US means higher demand for goods, and this also helps the Canadian economy.
Another reason for expecting a good GDP result in Canada is the higher prices of oil in recent months. Oil is trading around $80 after trading for a long time in the 60s. Although a significant part of this rise happened only in September, this rise will also impact Canada, which exports lots of oil.
USD/CAD Technical Preview
USD/CAD now trades at 1.0671, between two technical barriers: 1.0625 from below and 1.08 from above. It bounced off the resistance line of 1.08 after the American GDP publication.
It still is above the 1.0625 line, that served beforehand as a resistance line. A good GDP result in Canada will send USD/CAD below this line, where it will encounter the 1.04 area. It broke below 1.04 when excellent employment figures where released there.
A disappointing GDP result – contraction in August, will send USD/CAD above 1.08. The next resistance line is 1.1130. See the USD/CAD Forecast for more.
I believe that the Canada’s GDP for August will be positive, but of course, anything can happen.
Enjoyed the post? You may want to subscribe by RSS feed or Email.Tags: canadian dollar,GDP,interest rate,loonie,resistance line,risk appetite,support line,Technical Analysis,USD/CAD,USD/CAD Technical Analysis
Comments
11 Responses to “Canadian dollar should enjoy good GDP”
Leave a Reply
Popular Forex Posts
Daily FX Headlines- Forex Strategy Corner: Bollinger Bands Techniques for Trading September 2, 2010
- EUR/USD: Trading the Change in U.S. Non-Farm Payrolls September 2, 2010
- US Dollar Forex Options Sentiment Points to Pullbacks September 2, 2010
- The FX Market has now Entered the Pull of Friday NFPs September 2, 2010
- British Pound Forecast to decline Against Japanese Yen September 2, 2010
-
Stay up to date!
-
-
[...] month of October ends with many economic indicators around the world, with Canadian GDP standing out. Let’s see what’s on the menu [...]
[...] suffered a disappointing GDP release. GDP had all the reasons to rise, and the disappointment was stopped only by the 1.08 resistance line, altogether a 300 pip [...]
[...] GDP had many reasons to rise, but it fell. This week’s disappointing GDP result hurt the Canadian dollar. Can employment [...]
[...] to the negative GDP last month, that didn’t meet expectations, and the dovish rate statement before that, the situation of the Canadian economy isn’t that [...]
[...] on the pair. The negative change in the Canadian dollar’s direction was done also by the falling GDP. Now it was confirmed by this week’s bad employment [...]
[...] similar to the American one. The recent negative monthly GDP hurt the Canadian dollar that had many reasons to rise. This wasn’t the only problem. Mark Carney, head of the BOC, released a as a dovish rate [...]
[...] the move south in the past week, the GDP is still problematic and also recent employment figures disappointed. Only a jump in prices, that can theoretically be [...]
[...] recent inflation figures failed to lift the loonie, and with bad GDP and shaky employment, the loonie needs fresh good figures to [...]
[...] which will close Q3. Changes in the economy have been small, around zero. Last month’s GDP didin’t meet expectations, and fell by 0.1%. This time, a rise of the same scale is [...]
[...] GDP for September, and it’s expected to turn positive after last month’s drop, that didn’t meet expectations. In the US, Chicago PMI is the first indicator for this [...]
[...] Earlier this week, GDP for September, the last month of Q3, rose by 0.4%. This marks the end of recession also for Canada. On the other hand, early expectations were for a rise of 0.5%. Expectations for Canadian growth weren’t met again. [...]