Canadian GDP figures for May came largely in line with Bloomberg News survey expectations. The y/y number came in at +1.6% versus +1.6% expected. The m/m figure came in at +0.2%, slightly below the +0.3% that Bloomberg News survey analysts expected. Canada releases GDP every month and the +1.6% change is an increase over April’s +1.4%.
The slightly bearish Canadian data is in contrast to the strong US GDP data which was released at the same time. US Annualized GDP (QoQ) for 2Q gained +1.7%, above the Bloomberg News survey consensus of +1.0%. While there was a strong downward revision in 1Q GDP from +1.8% to +1.1%, the USDCAD still reacted bullishly.
Recall the strong connection between the US and Canadian economies. The US accounts for roughly 70% of Canadian exports.
USDCAD 1-minute Chart: July 31, 2013
Charts Created using Marketscope – prepared by Kevin Jin
The USDCAD is higher by roughly +10 pips following the combination of Canadian and US GDP. The initial reaction was +30 pips but the pair quickly began to retrace.
--- Written by Kevin Jin, DailyFX Research
Are you new to trading? Watch this.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.