When is the Canadian GDP report and how could it affect USD/CAD?

Canadian GDP overview

Friday's economic docket highlights the release of monthly Canadian GDP growth figures for June, scheduled to be published at 12:30 GMT. Statistics Canada will also release the annualized quarterly growth rate, making this event more significant than the ones including only monthly data. Consensus estimates suggest that the economy recorded a strong growth of 5.6% during the reported month and contract by a record 39.6% annualized pace during the second quarter of 2020.

How could it affect USD/CAD?

Given that the second-quarter figures were influenced by the coronavirus-induced lockdown, traders will take cues from the monthly print. Ahead of the important release, the USD/CAD pair was seen struggling near the lowest level since January, below the 1.3100 round-figure mark. A stronger-than-expected reading will be enough to provide a modest lift to the Canadian dollar and continue exerting pressure on the major.

Conversely, the market reaction to any disappointment is more likely to remain limited, rather negated by the heavily offered tone surrounding the US dollar. This, in turn, might fail to provide any respite to the bulls or assist the pair to register any meaningful recovery.

Key Notes

Canada: Economy to contract by a record 36.3% in second quarter – TDS

USD/CAD weakens further below 1.3100 mark, lowest since January

USD/CAD: Resiliency of Canadian dollar unlikely to last if USD recovery gains strength

About the Canadian GDP

The Gross Domestic Product released by Statistics Canada is a measure of the total value of all goods and services produced by Canada. The GDP is considered a broad measure of Canadian economic activity and health. Generally speaking, a rising trend has a positive effect on the CAD, while a falling trend is seen as negative (or bearish) for the CAD.