Canada’s Economy Flat in September. Canada’s GDP was expected to grow by 0.1%. The annualized growth rate also disappointed: growth of only 0.6% instead of 0.8%.
This disappointment send USD/CAD climbing higher. The pair already began rising in the hours before the publication, and is now extending the move, flirting above 0.9950.
One of the worrying points is a drop in business investments, as well as a drop in exports. In general, global trade is winding down.
Parity is still somewhat far. This is the second month in a row that Canada disappoints, after seeing a squeeze of 0.1% in August, also lower than predicted.
It’s important to note that the Canadian dollar is more affected by US figures than local ones in recent weeks. Also the weak jobs report in Canada was overshadowed by a positive Non-Farm Payrolls report in the US, resulting in a gain for the loonie – a lower USD/CAD.
In the US, personal spending dropped by 0.2% while personal income remained flat. Core PCE Price Index rose by 0.1%, weaker than +0.2% that was estimated.
For more on the loonie, see the Canadian dollar forecast.
