Q2 GDP a downside risk for CAD
CAD has come under selling pressure as crude oil prices slipped by nearly 2%. We are below market consensus expecting Canada’s Q4 GDP to slow to 1.3% q/q annualized growth (1.6% expected, from 2.5% in Q1), reflecting the impact of the flooding in Calgary and construction strikes in Quebec. The break of the recent USDCAD high of 1.0562 would open the path to the July high of 1.0609. Despite this near-term vulnerability, we expect stronger US growth in H2 to support relative CAD outperformance over the medium-term.
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BNP Paribas