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Canada: Unexpected contraction in Gross Domestic Product hits CAD

  • Canada’s third-quarter gross domestic product contracted 1.1% from a year earlier.
  • Canada will release its monthly employment report on Friday, which will introduce more noise into USD/CAD.
  • USD/CAD advances on the news as CAD suffers from the negative surprise.

Canada’s real gross domestic product (GDP) rose 0.1% month-on-month in September, better than the flat reading anticipated by financial markets. The annualized reading for the third quarter, however, recorded a sharp decline of 1.1%, much worse than the 0.2% gain predicted by financial markets. The quarterly reading registered -0.3%, contraction compared to the 0.3% increase in the second quarter.

On Friday, Canada will release its monthly employment report, in which the unemployment rate is expected to be 5.8%.

USD/CAD rose on the GDP numbers as investors increased bets on a Bank of Canada on hold amid increased recession risk.

Source: Fx Street

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