Canada’s economy likely to have grown 2.4 pct in Q2, says Wells Fargo

Canada’s economy expanded at an annualized rate of 3.7 percent in the first quarter that lifted the year-on-year rate of GDP growth to a 10-quarter high of 2.3 percent. Growth was widespread in the first quarter, with real personal consumption expenditures expanding in excess of 4 percent and investment spending rising sharply by 10 percent.

Real GDP growth is expected to have been even stronger in the first quarter had imports not risen almost 14 percent. GDP data for the second quarter is set to be released next week. Even if the economic growth is expected to have slowed, the Canadian GDP is likely to have grown 2.4 percent in the second quarter, according to a Wells Fargo research report. A sharp rise in monthly GDP for May implies upside risk both of this quarter and for the whole of 2017 growth projection of 2.7 percent.

With the economy showing signs of strength, The Bank of Canada is expected to follow the 25 basis points rate hike that it announced in July, with another hike in its main policy rate as early as its October meeting, stated Wells Fargo.

At 23:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was bullish at 87.1094, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -46.9752. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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