MACRO 5 minutes to read

Canada serves up an early-bird special

Summary:  USDCAD is in focus on the rocket-fuelled rally that followed StatsCan's early release of its latest GDP print.


Someone at Statistics Canada goofed, releasing the December Q4 GDP report about 15 minutes earlier than scheduled. For FX day traders and scalpers, however, it was a lifetime – especially if they were short USDCAD.

The early bird gets the worm and today, it got the GDP scoop as well. Q4 GDP rose 0.4%, quarter-over-quarter, well below the 1.2% forecast and sharply lower than the 2.0%, q/q seen in November. Statistics Canada blamed lower oil prices and a 2.7% drop in investment spending for the weakness.

Today's Q4 GDP was expected to be weak, but this print ensures that the Bank of Canada will leave monetary unchanged at its March 6 meeting.
USDCAD soared, rising from 1.3150 at 8:15 am EDT to 1.3238 as of 8:58 am EDT, taking out resistance at 1.3180 and 1.3205 in the process. USDCAD tested long-term uptrend line support, which came into play at 1.3120 today. It held. A decisive break above the 1.3240 and then the 100-day moving average at 1.3160 targets 1.3360 and then 1.3665. However, surging oil prices should limit USDCAD gains.

Wall Street is trading in positive territory, erasing all of yesterday’s losses. Prices were bolstered by the modestly positive risk-on sentiment seen in Asia and Europe.

 “Get your motor runnin’, head out on the highway..." That’s what Elon Musk wants you to do, and he wants you to do it in a Tesla. And to make it more appealing, Tesla announced that the $35,000 Model 3 is available to purchase online, immediately. Tesla also said that prices of its other vehicles will drop about 6%. TSLA shareholders were not impressed and prices dropped 5.75% in early New York trading.
USDCAD (daily, source: Saxo Bank)
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