Weak Canada Q1 GDP Pushes USD/CAD Toward 1.38 on Stagnant Growth

Canada’s Q1 2026 GDP surprised sharply lower at -0.1% annualized versus +1.5% expected, leaving real GDP flat at 0.0% quarter-on-quarter. March monthly GDP contracted -0.1%, while goods-producing industries fell -0.8%, quickly reducing Bank of Canada tightening pressure and lifting USD/CAD toward 1.38. Offsetting signals include a 0.4% April rebound estimate and a 0.2% rise in per-capita GDP as population declined for a second quarter, with services PMI at 49.2 reinforcing broadly stagnant activity.