Judging by the price action in foreign exchange markets, investors might be forgiven for thinking it’s a Public Holiday in Canada. Over the whole of the last 36 hours, USD/CAD has been trapped in a range from 1.2809 to 1.2849; the quietest period in many weeks.
Canada is one of the very few countries to release GDP figures on a monthly basis (the official statisticians in Australia and New Zealand can’t even calculate CPI monthly!) and though it’s expected that the latest figures will show only a slight moderation in the annual rate of growth to 3.6% from 3.8%, much of this growth came earlier in the period before the BoC moved to twice hike interest rates. Monthly GDP in July was unchanged and the August numbers out this morning are expected to be up just 0.1% m/m. After yesterday’s consumer confidence numbers showed the sub-index tied to perceptions about the economy and housing had the lowest month-end reading since January, investors shouldn’t be holding their breath for a pick-up in Canadian GDP any time soon.
For the day ahead, last Friday’s high of USD/CAD1.2906 will be the level to watch in case of any further disappointment in the economic data.