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  • Economic activity in Canada rebounded at a softer pace than expected in Q3.
  • USD/CAD continues to trade in the negative territory below 1.3000.

Real Gross Domestic Product (GDP) in Canada grew by 8.9% on a quarterly basis in the third quarter after contraction by 11.3% in the second quarter, the data published by Statistics Canada showed on Tuesday. On a yearly basis, the economy expanded by 40.5% in Q3 and missed the market expectation for a growth of 47.6% by a wide margin.

“The increase in GDP in the third quarter reflected reopening of the economy, with substantial upturns in housing investment, household spending on durable goods and exports,” Statistics Canada noted in its publication. “These upturns were influenced by favourable mortgage rates, governments’ continued support to households and businesses affected by the pandemic, and growth in major trading partners’ economies in the third quarter.”

Market reaction

The USD/CAD pair edged modestly higher after this data and was last seen trading at 1.2975, where it was down 0.2% on a daily basis.