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“GDP growth slowed to 0.4% in Q4, underperforming the market consensus (1.0%) and the Bank of Canada’s forecast for 1.3%,” TD Securities said on today’s growth data from Canada.

Key quotes

“Details were broadly downbeat, with multi-year lows in household spending, business investment and a 0.1% decline in industry-level GDP for December (market: unch).”

“This will provide a challenging backdrop to next week’s Bank of Canada meeting. Governor Poloz has been steadfast in his view that rates need to move higher but with the sharp miss on Q4 and Q1 tracking below BoC forecasts, Poloz’s conviction may start to waver.”

“FX: The CAD notable weakened following the release in what is likely to be a more durable reversal of misfortune for the CAD. A move through 1.3240/65 should extend a USDCAD short squeeze towards 1.3380. We also think the conditions are in place for CAD weakness on crosses with a preference towards CADSEK downside (eyeing 6.85 in the coming weeks).”