The Canadian dollar dropped today after nation’s gross domestic product showed no growth in June, disappointing market participants. Hopes for a NAFTA deal remained a positive factor for the currency, which may support it in the near future.
Statistics Canada reported that GDP basically showed no growth in June after rising 0.5% in May. Markets were counting on at least small increase by 0.1%. The disappointing data may prompt the Bank of Canada to postpone the planned interest rate hike, though so far markets were still counting on an increase of borrowing costs.
Meanwhile, investors were hoping that the United States and Canada will be able to reach a trade deal, perhaps as soon as Friday. Indeed, Canada’s Prime Minister Justin Trudeau said that it is possible, though not guaranteed:
We recognise that there is a possibility of getting there by Friday, but it is only a possibility, because it will hinge on whether or not there is ultimately a good deal for Canada. No Nafta deal is better than a bad Nafta deal.
USD/CAD rallied from 1.2905 to 1.2977 as of 20:52 GMT today. EUR/CAD edged up from 1.5109 to 1.5137. CAD/JPY slumped from 86.45 to 85.57.
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