USD/CHF and EUR/CHF rose to tactical highs. What's next?
Will the Canadian dollar rise?
Information is not investment advice
The Canadian monthly GDP is announced on Wednesday at 15:30 MT time.
Instruments to trade: USD/CAD, EUR/CAD, CAD/JPY, CAD/CHF
In September, the Canadian economy grew 0.8% against the value of August. That’s a slightly weaker performance after 0.9% the month before, and significantly weaker than 2.5%, 6.2%, and 4.6% in the previous months consecutively. And the thing is, it’s not bad news: a developed country rarely sees figures higher than 1% of economic growth month over month. So seeing the GDP slowly calm down should mean that the Canadian economy is most probably getting back to normal. That’s a strategic view though. In the short-term, on the day of the GDP announcement, the market will move according to its expectations. If the GDP is better than thought, the market will push the CAD; otherwise, it will drag it down.
- If the GDP outperforms expectations, that may push the CAD.
- If the GDP underperforms, the CAD may go down.
Eurozone, France, and Germany will publish the flash services and manufacturing PMIs on February 19, from 10:15 to 11:00 MT time
Australia will publish the employment change and unemployment rate on February 18, at 02:30 MT time.
Fed Chair Jerome Powell will testify today at 19:05 MT time. This event is crucial for traders as the tone of the speech may set the risk tone for the markets for the next two weeks.
Non-farm payrolls, the most awaited economic report, will be out on March 5 at 15:30 MT time.
BoA has tracked signs of the upcoming stock market sell-off. While more expensive and at-risk stocks are set to fall, value stocks should survive.