USDCAD: GDP increase likely to break string of five consecutive declines – TDS

FXStreet (Delhi) – Prashant Newnaha, Rates Strategist at TD Securities, suggests that Canadian industry-level real GDP is forecast to have increased by 0.2% m/m in July and this forecasted gain would build on the 0.5% monthly pop in June which in turn broke the streak of five consecutive monthly declines.

Key Quotes

“Growth should be supported in large part by the manufacturing industry and the temporary lift from the PanAm games. Activity elsewhere is expected to be more subdued, with a soft performance expected from the real estate sector and in retail sales.”

“The rebound in growth to start Q3—currently tracking around 2.2-2.5%—will help eclipse the Bank of Canada’s very conservative 1.5% annualized forecast which will provide ample justification to keep the overnight rate on hold.”