CAD - Canada's economy unexpectedly shrinks 1.1% in third quarter
Data released on Thursday showed that the Canadian economy unexpectedly contracted at an annual rate of 1.1% in the third quarter, but avoided falling into recession. The data shows economic growth is faltering ahead of next week's interest rate decision. The third-quarter figure was below the 0.2% GDP growth forecast by analysts in a Reuters poll and below the 0.8% growth forecast by the Bank of Canada. Statistics Canada said the economy avoided a technical recession as second-quarter GDP data was revised to growth of 1.4% from an initially reported decline of 0.2%. The Bureau of Statistics said real GDP was likely to edge up by 0.2% in October, following a 0.1% increase in September. Combined with recent easing in inflation and employment data, the third-quarter economic contraction suggests the Bank of Canada will keep interest rates on hold at its next monetary policy statement on December 6.
The trend of the US dollar against the Canadian dollar is that the exchange rate is close to the 250-day moving average at 1.35. It seems that it can still hold on to this area this week. If it can still hold above this area early next week, the U.S. dollar against the Canadian dollar is expected to take a pause. The current resistance is looking back at the 25-day moving average of 1.3720 and 1.3850; the next level will point to the 1.40 or even 1.4150. The largest supporting level is estimated to be 1.34, or even the low of 1.3378 on September 19.
Resistance 1.3720 - 1.3850 - 1.4000* - 1.4150
Support 1.3500 - 1.3400 - 1.3378
Highlights of the week:
Canada's third quarter gross domestic product (GDP) year-on-year rate -1.1%
Canada's third quarter GDP quarterly rate -0.3%
Canada’s September GDP monthly rate +0.1%
Canada’s third-quarter GDP annual rate +0.47%
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