The Canadian economy is making a comeback, at least in June. A growth rate of 0.5% is far better than expectations. For the second quarter, the economy in Canada dropped 0.5% against 1% predicted. This was partially countered by a downwards revision of Q1 from a contraction rate of 0.6% to 0.8% now. Year over year, the growth rate is only 0.6%.
And the Canadian dollar rallies: a fall of 60 pips on USD/CAD to 1.13140. Update: the fall extends and the pair is nearing the support line at 1.3120.
All in all, the Canadian economy doesn’t look too good and is officially in recession with two consecutive quarters of contraction. However, the pace that it is shrinking could have been worse, and that’s why the loonie is finally gaining some ground.
Canada was expected to report a GDP growth rate of 0.2% in June after a 0.2% contraction in May. which was very disappointing. This publication concludes the second quarter.
USD/CAD traded around 1.32 before the publication.
The Canadian dollar only partially enjoyed the big recovery in oil prices. WTI Crude went all the way from the depths of the $38 handle to $48 in a series of wild swings. This is an ominous sign for the C$.
The Canadian economy is limping along despite the recovery in the US. Oil and also political uncertainty weigh on the loonie.
More: USD/CAD Bearish Rejection Candle Forming off Resistance – Looking to Sell
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