- The Canadian economy contracts 0.2% against expectations of a 1.2% expansion.
- USD/CAD remains in positive territory above 1.3500 after US data and NFP.
He Gross Domestic Product (GDP) Canada’s real contracted at an annual rate of 0.2% in the second quarter, Statistics Canada reported on Friday. This figure follows the 2.6% expansion (revised from 3.1%) recorded in the first quarter and was worse than the market forecast for 1.2% growth.
On a quarterly basis, real GDP stagnated versus analysts’ estimate of a 0.3% expansion. During the first quarter, it grew by 0.6% (revised from 0.8%).
On a monthly basis, real GDP contracted in June by 0.2%, in line with expectations. In May, the economy grew by 0.2% (revised from 0.3%).
Main data:
The real Gross Domestic Product (GDP) remained practically unchanged in the second quarter, after an increase of 0.6% in the first. The slowdown was attributed to the continued decline in investment in housing, the lower accumulation of inventories, as well as the slowdown in international exports and household spending. Increased business investment in engineering structures and higher public spending were some of the few components that contributed to growth.
The GDP deflator rose 0.7% in the second quarter as consumer inflation remained elevated.
The real Gross Domestic Product (GDP) decreased by 0.2% in June, after an increase of 0.2% in May. Both Service (-0.2%) and Goods (-0.4%) Industries contracted in June, with 12 of the 20 industrial sectors posting declines.
Market reaction
The Loonie weakened in the market after the data was released. Not only did the Canadian economy contract unexpectedly during the second quarter, but previous figures were revised downward.
The USD/CAD pair rallied slightly to hit fresh all-time highs above 1.3520. At the same time, the official US employment report was released, which triggered a fall in the dollar and limited the pair’s gains.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
