"Although economic growth under 2 per cent is hardly a great result, it does extend Canada's recent string of steady and moderate economic growth"
- Jonathan Bendiner, Toronto-Dominion Bank economist
A slew of important fundamental data form the world's largest economy, including pending home sales, durable goods, consumer sentiment as well as the second estimates for the first-quarter GDP will capture the attention this week. Moreover, there will be no shortage of comments from the policymakers, as there will be speeches from Dennis Lockhart, Charles Plosser and others. The highly-anticipated GDP report, however, may not be the catalysts to support the greenback. The Bureau of Economic Analysis is likely to show the economy contracted 0.5% in the first quarter. Any reading below expectations will weigh on the buck, as it affects interest rate expectations and the Federal Reserve's move to normalize its monetary policy.
It is also important to mention, that Canada's plodding economy will outperform its neighbour in the first quarter. While the U.S. economy will shrink, Canada's GDP is likely to expand 1.7%- still an impressive rate, even though a dramatic slowdown from previous quarter's 2.9%. The big story in both countries was the extreme weather conditions, which affected all sectors from home building to consumer spending and shipments. While policymakers predicted a rapid growth for the U.S. economy, some have already warned that growth will be nowhere near the 3% pace, with some even claiming Canada to growth faster than the United States for the rest of this year.
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