Connect with us


Canadian dollar eyes GDP

The Canadian dollar is trading quietly today, just above the 1.2900 level. That could change in the North American session, with the release of Canada’s…



This article was originally published by Market Pulse

The Canadian dollar is trading quietly today, just above the 1.2900 level. That could change in the North American session, with the release of Canada’s GDP for April.

GDP expected to soften

Canada’s monthly GDP releases have been pointing southwards. In March, GDP slowed to 0.7, down from 0.9% prior. The April estimate stands at just 0.3%. This is a sign of concern, although there are some bright clouds on the horizon. The war in Ukraine, which has disrupted oil and grain supplies and sent commodity prices soaring, has proved to be a boon for the Canadian economy, as Canada is the world’s fourth-largest producer of both oil and wheat. The IMF is projecting that Canada will lead the G-7 nations in growth with a GDP of 3.9%.

Canada has not been immune from spiralling inflation, as headline CPI rose to 7.7% in May, its highest level since January 1983. Similar to the Federal Reserve, the Bank of Canada has scrambled to tighten policy in order to wrestle down inflation, which has become the central bank’s public enemy number one. There are expectations that the BoC may follow the Fed’s lead and deliver a super-size 0.75% rate hike at its July 12th meeting. Inflationary pressures are broad-based across the economy, which raises the risk of inflation (and inflation expectations) becoming entrenched.

The BoC’s aggressive rate-hike cycle has led to the start of a correction in the housing market, but the long-sought-after inflation peak remains elusive. The BoC has the daunting challenge of trying to guide the economy to a soft landing – if interest rates rise more than the economy can handle, the result will be a recession. The BoC, like the Fed, appears to prefer a recession over entrenched inflation, which is why we can expect the BoC’s aggressive rate moves to continue.


USD/CAD Technical

  • There is resistance at 1.2942 and 1.2994
  • USD/CAD has support at 1.2844 and 1.2792

interest rates
central bank


Long Term Returns Are Unsustainable

Long-term returns are unsustainable.

I realize that is a bold statement that flies in the face of mainstream analysis. How often have you seen the following…

Continue Reading

Crypto news: Ethereum Merge draws closer; DAI dollar depeg proposed by Maker founder

It’s blockchain beer o’clock and Ethereum devs have brought forward the Merge. There’s further frothy news about for DAI and … Read More
The post Crypto…

Continue Reading

The Housing Shortage Could Be Solved by Israel’s Latest Project

Much of the world is grappling with an acute housing shortage. But in Israel, a pioneering project called Tama 38 is steadily increasing urban density….

Continue Reading