A slightly better than expected growth rate in Canada in July: +0.3%. However, this came on top of a downwards revision for June: +0.4% instead of +0.5% originally reported.
The immediate reaction was a stronger Canadian dollar: USD/CAD slipped under 1.34. However, this positive effect doesn’t last too long.
More figures: Year over year, the Canadian economy has grown by 0.8%, better than 0.7% expected and stronger than +0.5% in June.
Canada was expected to report a monthly growth rate of 0.2% in its economic output in the month of July, the first month of Q3. This comes after +0.5% in June, which was not enough to prevent a recession in Canada.
USD/CAD traded around 1.3420 towards the release, holding its high ground.
The Canadian dollar showed a tendency to slide with the prices of oil but it failed to rise when prices recovered. The Bank of Canada has already cut rates twice this year and another slash from 0.50% to 0.25% is certainly on the cards.
In our latest podcast, we dedicated time to what’s going on in Canada:
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