CAD under pressure, Canada GDP contracted, PPI increases

Canada GDP disappoints

Data from Stats Canada this morning showed that the Canadian economy contracted in February, falling short of expectations, as both mining and rail transportation recorded sharp declines.

Canada’s GDP contracted -0.1% in February from the previous month to a seasonally adjusted C$1.946T. Market expectations were looking for a flat reading. On a year-over-year basis, the Canadian economy advanced +1.1% in February.

Canada PPI rises

Stats Canada also reported that Canadian producer prices (PPI) rose last month because of higher prices for energy and petroleum products. Meanwhile, the country’s raw-materials price index also rose.

Canada’s industrial product price index rose +1.3% in March, following a +0.3% increase in February.

Note: Of the 21 commodity groups tracked for PPI, 16 were up, one was down and four were unchanged.

On a 12-month basis, the index rose +1.5%.

Elsewhere, prices paid by manufacturers for raw materials rose by +2.8% in March, following a revised +3.0% increase in February. On a 12-month basis, prices for raw materials were down -1.5%.

Loonie under pressure

CAD’s initial reaction to this morning released data is to reverse course from the loonie’s high of the day so far. USD/CAD is currently trading C$1.3448, paring some of CAD’s gains on the back of a softer USD over the past 24 hours.

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell