The Canadian dollar is rallying to finish the trading week, driven by a better-than-expected gain in second-quarter gross domestic product. The loonieâs rebound may give credence to analystsâ predictions that the currency is poised for a breakout performance to close out the year. Because the Canadian economy has been so anemic for much of 2019, the dollar has been struggling against most major currency rivals as of late.
In June, the Canadian economy expanded 0.2%, unchanged from the previous month and higher than the market consensus of 0.1%. Overall, the economy grew at an annualized rate of 3.7% in the second quarter, surprising financial markets which had anticipated 3% growth. This is the largest quarterly gain in two years.
So, what were the winners and losers in June? According to Statistics Canada, goods-producing industries slipped 0.2%, mostly in the manufacturing sector (-1.4%). But services-producing industries climbed 0.3%, mainly in wholesale trade (0.9%).
On Friday, the Industrial Product Price Index (IPPI) tumbled 0.3% in July, up from a 1.4% decline in the previous month. Analysts penciled in a 0.1% jump. Also, raw materials prices rose 1.2% last month, a dramatic surge from the 6.1% drop in June.
Canadian investors and policymakers are reading a new report by the Royal Bank of Canada that stated how the nationâs agriculture industry will contribute an additional $11 billion annually to the GDP by 2030, should the federal government choose to invest in farmers and technology. But John Stackhouse, senior vice president at RBC and contributor to the report, cautions that Canada could lose out tremendous global market share to Australia, Israel, the Netherlands, and the US if the country decides not to do anything.
The demand for food is growing significantly and itâs going to be massive in the 2020s.
We have a historic opportunity here to take advantage of new technologies that are coming onto the market and are being adapted already in large parts of Canadian agriculture.
We have the opportunity to scale them, but weâre not going to scale them if we donât have the people and the skills to take advantage of them.
The USD/CAD currency pair dipped 0.15% to 1.3270, from an opening of 1.3290, at 13:33 GMT on Friday. The EUR/CAD tumbled 0.29% to 1.4650, from an opening of 1.4685.
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