Canada’s economy falls by 8.2% annualized in Q1, better than expected, USD/CAD shakes

The Canadian economy squeezed by an annualized rate of 8.2% in the first quarter of 2020, better than -10% expected. Quarterly, Gross Domestic Product (GDP) squeezed by 2.1%. Most of the downfall occurred in March, with a drop of 7.2%, better than 8.5% projected. 

USD/CAD is trading around 1.3740, up from the lows, amid dollar some US dollar strength. Here is the 15-minute chart:

The US reported a fall of 13.6% in Personal Spending, worse than expected. The risk-off sentiment may be helping the greenback. 

Canada was expected to report an annualized fall of 10% in first-quarter Gross Domestic Product. The nation’s provinces entered lockdown during March in order to curb coronavirus. The fall in oil prices, a critical Canadian export, had begun earlier in the quarter when demand from China diminished. 

For comparison, the US economy squeezed at an annual pace of 5% in Q1 according to updated statistics. The eurozone suffered an annualized fall of around 15%. 

USD/CAD had been dropping ahead of the publication, trading closer to 1.37 amid US dollar weakness. The greenback is on the back foot amid end-of-month flows and uncertainty about Sino-American relations, ahead of President Donald Trump’s speech on China.

More: US Pres. Trump to hold China news conference on Friday, risk-off themes will be in play.