Forex: USD/CAD: Significant upwards revision of US GDP – rise by 4.1%

on Dec 20, 2013
Updated: Oct 21, 2019
Listen Friday, December 20th:_ The US economy expanded at an annual rate of 4.1 percent in the third quarter of this year, which is a significant upwards revision from the previous calculation following the release of the latest data, which today showed that consumer spending increased during the summer. According to final estimates, the Gross Domestic Product (GDP) rose at its strongest pace since the fourth quarter of 2011, the second largest increase since the middle of 2009. Analysts had expected no change in the 3.6 percent growth in the second estimate of GDP. Better results were mainly due to higher consumer spending, which according to final data rose at an annual rate of two percent compared to 1.4 percent in the preliminary assessment.

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.

Retail Sales in Canada fell in October after a poor performance in the automotive sector contributed the most to the negative result. According to official data, Retail Sales dropped by 0.1 percent from September to C$40.72 billion. Analysts at Royal Bank of Canada had forecast the index to rise by 0.2 percent. In volume terms retail sales were up 0.2 percent, and on an annual basis the index was up three percent. Core Retail Sales jumped by 0.4 percent in October, while analysts had been expecting a zero percent change.

The annual inflation rate in Canada rose by less than one percent for the second consecutive month in November. On a monthly basis, the Consumer Price Index remained unchanged, while the Core CPI m/m fell by 0.1 percent, marking the first decline since May.

Following this news the USD/CAD jumped by 0.6 percent to 1.0736, reaching its highest point since 26 May 2010. Subsequently, the price retraced to be currently at 1.0695, 8.35 percent up from the beginning of the year.

According to BMO Capital Markets, “today’s CPI and retail sales reports reinforce the message that Canada looks locked in a world of one percent inflation, with moderate growth unlikely to shift that reality”, and adds that “while the headline result is a bit disappointing, October retail activity is consistent with continued moderate growth in consumer spending. The modest gain in volumes puts October GDP on track for a 0.2 percent gain and Q4 on pace for 2.6 percent growth”.
Trade Forex with Alpari now.


Want easy-to-follow crypto, forex & stock trading signals? Make trading simple by copying our team of pro-traders. Consistent results. Sign-up today at Invezz Signals.

Learn more
CAD Forex