Forex Blog

October 30, 2009

Canada’s GDP Shrinks!

Canadian GDP unexpectedly fell .1%, vs. a .1% gain analysts had expected.  This is significant because it means that Canada may not be exiting the recession as fast as they and others had hoped.  As a result, interest rates are expected to remain at the record-low .25% for some time to come.  As can be expected, the Canadian dollar (CAD), otherwise known as the “Loonie”, is down across the board, most notably against the Yen (-1.48%), the US dollar (-1.19%), and the Euro (-1.08%).

BOC Governor Carney has been talking down the Loonie as it came close to parity with USD in mid-October; I guess this was a little more than just jaw-boning.   So while the Canadian economy is still technically contracting, this doesn’t appear to be a major miss that is going to send them down further.  If they get a bit of currency relief, that will help their exports so look for them to exit recession next quarter.

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