BREAKING: CAD weakens after disappointing GDP data

The Canadian economy stagnated at0.0% in latest quarter, following a 0.7% growth in Q3. 

On an annualized basis the economy decreased to 0.0% on quarter in Q4 2022, well below market forecasts of 1.5% expansion. Slower inventory accumulations along with declines in business investment in machinery and equipment and housing offset higher household and government spending and improved net trade.

Today's figures minimize the chances for the rate increase from BOC next week, although it is worth remembering that the bank already hinted that it will pause the tightening cycle next month. On the other hand, the data from January and February were rather encouraging, but most likely will not be insufficient to change the BOC approach. In addition, according to recent speculation, the Fed would raise rates up to 6% (BofA).

Latest figures put an end to five consecutive quarters of growth. Source: Statistics Canada

USDCAD bounced off  long-term upward trendline after today's GDP data releases and may be heading towards next resistance level at 1.3610. Source:xStation5