- US GDP for Q2 is the most important reading for today
- CAD could be prone to a corrective move as GDP from Canada to come in as well
- German inflation might steer the euro exchange-rate
Today’s calendar is packed with numerous readings of GDP. The first one from France came in an hour ago and was at 0.5% qoq which was in line with expectations. However, much more will be released later in the day with the US print being a cherry on top. Besides, there will be a reading of German inflation for July (preliminary one). All in all, volatility on the FX market might be lofty today.
8:00 am BST – GDP from Spain: The forests suggests that growth in Q2 in Span has picked up 3.1% yoy which could mean a slightly better than expected print compared with Q1. Admittedly, it is rarely a market mover, it could point whether an improvement in the so-called PIGS economies remains firm.
1:00 am BST – German inflation: There is no doubt that inflation reading are always worth looking at, especially as it will be a preliminary one, hence an impact on the FX market could be even more visible. CPI for July is expected to come in at 1.5% yoy while the previous month saw a rise 1.6% yoy. HICP is forecast to be at 1.4% yoy against the prior figure at 1.5% yoy.
1:30 am BST – US and Canadian GDP: For that reason the USDCAD could be the most volatile pair in G10. What’s more, a weekly interval could herald that we are at a tipping point which, in turn, could result in a rebound in the price in oncoming days. Taking into account that the CAD has been in a buying spree lately, a possible feeble release of GDP for May could be a good reason to take advantage of recent longs. Moreover, the US dollar might move up as well as the Citi’s macroeconomic surprise index is improving while a possible bullish candlestick on the USD index (USDIDX on xStation5) could emerge as well. That said, a solid GDP print is needed to take the greenback higher. The consensus suggests an increase 2.6% yoy, whilst in case of monthly Canadian GDP it’s anticipated to rise 0.2% in May.
The USDCAD could rebound if US data beats expectations later today. However, in order to exert move sustained upward pressure on the pair, a disappointing figure from the Canadian economy should be needed. Source: xStation5