- The Canadian Dollar climbed 0.7% against the Greenback in Friday.
- Upbeat Canadian GDP growth figures sent Loonie traders scrambling for the buy button.
- The CAD is back in sight range of six-month highs.
The Canadian Dollar (CAD) found some room on the top side on Friday, spurred higher by a better-than-expected print in Canadian Gross Domestic Product (GDP) growth figures for the first quarter. Ongoing trade turmoil from the Trump administration has kept the US Dollar (USD) hobbled near multi-year lows, giving the Loonie a chance to gain fresh ground.
The Canadian economy grew by 2.2% through the first quarter, soundly thumping median market forecasts and sending the Loonie back into recent highs against the Greenback. However, not all is sunny on the Canadian economic front: overall consumer spending slowed during Q1, with the slack getting hidden behind a surge in both imports and exports as firms spent most of the first quarter either rushing products out the door, or stockpiling goods and products ahead of the start of the Trump administration’s global tariff rollout.
Daily digest market movers: Canadian Dollar steps higher as GDP beat trims BoC rate cut bets
- Canadian Q1 GDP rose 2.2%, handily vaulting over median market forecasts for a 1.7% print.
- Despite the headline beat, Canadian GDP figures are doing a poor job of papering over growing cracks:
- Canadian GDP from the previous quarter was revised sharply lower to 2.1% from 2.6%, and further revisions should be expected moving forward;
- Actual consumption spending declined in Q1, but remains hidden behind a significant uptick in both exports and imports as businesses stockpiled ahead of US tariffs announced in April.
- Canadian employment figures reveal a widening unemployment gap, particularly among younger Canadians.
- The upswing in Canadian quarterly GDP knocked back bets of another rate cut from the Bank of Canada (BoC).
- Rate markets are now pricing in 80% odds of a rate hold at the BoC’s next rate call.
Canadian Dollar price forecast
Fresh bidding pressure bolstered the Canadian Dollar against the US Dollar on Friday, sending USD/CAD within reach of six-month lows just south of the 1.3700 handle. Price action continues to see daily candles trading toward the low side as an ongoing downtrend keeps bids on a bearish trajectory.
USD/CAD daily chart
