The Canadian Dollar has been on a decline for a number of weeks, with little going its way. The release of the Canadian GDP data to start the week saw CAD on the back foot. With GDP dropping for Canada, the economy has taken a hit alongside the confidence from investors.
GDP Data Dropped from Previous Report, Canadian Dollar Takes a Hit
The release of the Canadian GDP was a negative blow for CAD. With figures dropping sharply from 3.5% to 1.3%. This news has given CAD a back-handed start to the week of trading. The Economist predicted the figure to be at 1.2%, so it was a slight increase on this but definitely nothing to be happy about. The Gross Domestic Product of Statistics Canada (GDP) is a measure of the total value of all goods and service which are produced within Canada. The GDP is seen as a major indicator of the growth and wellbeing of Canada’s economy, therefore this negative showing for GDP has pushed Cad further down the slippery slope it’s recently found itself on.
Breakdowns in the US-China Talks Also Hit CAD Hard
President Trump has been busy tweeting away to start the week. His content mainly presided over tariffs and has suggested that countries are taking advantage of USD’s strength and are causing a difficulty in US farmers and manufacturers to fairly export their goods. He urged Canada’s Federal Reserve to follow suit. Trump also touched on Chinese tariffs, which was one of the major talking points in the trade talks. With Trump looking to tighten up on tariff roll-outs, it is looking unlikely that a ‘Phase One’ deal will be signed by both parties.
China also responded to Trump’s signing of the Hong Kong Human Rights and Democracy Act, they announced sanction on two US pro-Democracy groups and the suspension of US warship and military visits to Hong Kong. This tension is weighing heavy on a deal being made and the news has hit CAD hard as the deal looks very unlikely to go through with the bad blood between the two.
For the Canadian Dollar, the outlook isn’t looking bright, but the Bank of Canada’s rate decision is on Wednesday followed by the OPEC+ meetings on both Thursday and Friday, with the Canadian jobs report coming out on Friday. CAD and its investors will be hoping for positive news to give a much needed boost to the economy amidst a run of bad news.
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