USD/CAD: Softer growth data might add to near-term pressure on the Loonie – Scotiabank

CAD slips back to the mid-1.36s ahead of GDP data. Economists at Scotiabank analyze how Canadian growth data could impact the Loonie.

April’s flash estimate may provide a ‘heads-up’ for slower growth ahead

“Growth data is expected to slow somewhat in Mar (-0.1% MoM) relative to Feb’s result but Q1 overall has been shaping up to be relatively strong (2.5% growth SAAR, close to the Apr MPR’s estimate of 2.3%).”

“Apr’s flash estimate may provide a ‘heads-up’ for slower growth ahead (recall the MPR anticipated GDP slowing to 1.0% SAAR in Q2 after a strong start to the year). That would not detract from our view that a little more ‘insurance’ tightening from the BoC is appropriate amid sticky inflation and signs that the housing market is taking off again but softer growth data might add to near-term pressure on the CAD.”