THE TAKEAWAY: CAD Gross Domestic Product (FEB) > +0.3% versus +0.2% expected, from +0.3% (revised up from +0.2%) (m/m) > +1.7% versus +1.3% expected, from +1.1% (revised up from +1.0%) (y/y) > USDCAD BEARISH
Source: Bloomberg –prepared by Christopher Vecchio
Stale but nevertheless important growth data from February released today showed that the world’s eleventh-largest economy beat expectations, sending the Canadian Dollar to fresh highs versus the US Dollar. The Canadian economy grew by +0.3% in February, slightly above the +0.2% forecasted figure (all on a monthly-basis), while over the past year, the economy grew by 1.7%.
Needless to say, the stronger growth data continues to unwind some of the concerns that have arisen in recent weeks. The Canadian Dollar lagged the other commodity currencies, the Australian and New Zealand Dollars, as the Bank of Canada said that an interest rate hike was “less imminent” amid disinflation that saw the yearly CPI rate fall to +1.0%. However, rate expectations are firmly in neutral now that it appears the BoC will be in neutral through at least the 3Q’13.
USDCAD 1-minute Chart: April 30, 2013
Charts Created using Marketscope – prepared by Christopher Vecchio
Following the release, the USDCAD fell from a high of 1.0115 to as low as 1.0095, continuing the downtrend in USDCAD since earlier in European trading. At the time this report was written, the USDCAD remained under 1.0100 at 1.0098.
--- Written by Christopher Vecchio, Currency Analyst
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