Canada: GDP Exhibits Indication of Rapid Growth, Before Delta Surge

Azeez Mustapha
27 August 2021 | Updated: 27 August 2021

The Canadian GDP figures this week should indicate that economic activity rebounded in June following COVID’s spring wave. With anticipated 0.8 percent growth in June GDP, which is somewhat higher than Statistics Canada’s early estimate of 0.7 percent. This would reverse the declines seen in April and May, resulting in a small 2.5 percent (annualized) increase in output in the second quarter. However, the reopening of the economy is expected to result in another significant gain in July.

Manufacturing activity is still hampered by supply chain disruptions, and residential investment is anticipated to have cooled as housing markets began to decline in Q2. Consumer spending on services has increased, especially in the travel and hospitality industries, which were severely hit by the pandemic. Spending on food services increased by 20% in June, and analysis of card transactions predicts another significant increase in July–akin to a comparable surge in the United States last spring, which swiftly pushed foodservice sales back beyond pre-pandemic levels.

The virus, which has continued to spread across much of Canada over the previous week, will determine how long such advances can be sustained in the short term. Vaccination rates are still rather high, which will likely limit the scope of any future containment measures. The spread of the virus has, at the very least, reduced the upside risk to the near-term prognosis, but the pandemic’s impact on economic activity in the second half of 2021 is likely to be much less than in the first.

Canada: USDCAD Pair Sinks to a Daily Low Under 1.2620

The USD/CAD pair reversed course after climbing above 1.2700 earlier in the day and was last seen trading at a daily low of 1.2612, down 0.50 percent on the day. USD/CAD appears to be weighed down by broad-based USD weakening following FOMC Chairman Jerome Powell’s comments at the Jackson Hole Economic Symposium.

Whilst Powell stated at the July policy meeting that it may be prudent to begin reducing asset purchases this year, he did not provide a date, causing the USD to fall. The US Dollar Index is currently trading at 92.77, down 0.3 percent on the day.

In response to Powell’s remarks, Federal Reserve Chair Jerome Powell bucked a noisy chorus of hawks among his colleagues by refusing to even hint at slowing the bank’s $120 billion-per-month bond-buying program, according to reports.

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$200 Min Deposit
9
  • Award-winning Cryptocurrency trading platform
  • 14 Cryptoassets available to invest in
  • FCA & Cysec regulated
$200 Min Deposit
9.8

Highly volatile unregulated investment products. No EU investor protection.

  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$100 Min Deposit
9.8
  • Trade top Cryptos such as Bitcoin, Litecoin and Ethereum plus more
  • Zero commissions and no bank fees on transactions
  • Around the clock service with support in 14 languages
$100 Min Deposit
8.5
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8
Share with other traders!
Azeez Mustapha

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.