Asian Currencies Stabilize as Dollar Holds Near Two-Month High After Fed Hawkish Signal 
Canada, British Columbia Launch $5 Billion Infrastructure Partnership to Boost Housing, Transit, and Healthcare 
Indonesia Passes New Central Bank Law, Raising Investor Concerns Over Policy Independence 
BOJ Signals More Rate Hikes as Inflation Risks Rise Amid Energy Price Pressures 
J.P. Morgan Sees Potential Vestas Guidance Upgrade Amid Strong Wind Energy Demand 
RBA Expected to Hold Interest Rates at 4.35% as Markets Watch AUD/USD and ASX 200 
China’s AI Manufacturing Boom Masks Weak Consumer Economy, Citi Says 
Taiwan Central Bank Likely to Keep Interest Rates Unchanged Through 2027 
South Korea Central Bank Holds Interest Rates Steady Amid Inflation Concerns 
Goldman Sachs: US Dollar Likely to Stay Strong Despite Oil Price Retreat 
US Stock Futures Slip After Wall Street Rally Fueled by US-Iran Deal and Chipmaker Surge 
Europe EV Demand Surges as Fuel Prices Rise Amid Iran Conflict 
Japan Signals Readiness to Intervene as USD/JPY Nears 161 Amid Yen Weakness 
Canadian real GDP grew by 0.5 percent in July, adding to June’s 0.6 percent gain. The July GDP gain exceeded economists' consensus of 0.3 percent. The strong July result was mainly driven by a continued recovery in oil production and petroleum-product manufacturing, following the devastating Alberta wildfires.
The second straight month of growth is bolstering confidence that the economy is back on track after being marred by the Alberta wildfires. The underlying details of the report showed July’s growth was actually broadly based, with 18 of 21 sectors showing growth.
The goods-producing side of the economy rose 1.0 percent on the month, led primarily by gains in mining, quarrying, and oil and gas extraction. The services sector increased 0.3 percent month-over-month in July, with most sectors posting an increase. Overall, the report shows modest growth in July, with growth excluding mining, oil and gas, coming in at a more modest +0.2 percent month-over-month.
Despite the robust growth over the past two months, the big question for the Bank of Canada (BoC) is export performance. BoC flagged exports as an area of concern in the latest policy statement. A soft report would reinforce those concerns, raising easing odds. BoC is thus likely to focus more on the evolution of trade (August data are due October 5th) and to maintain the somewhat dovish bias that has emerged in their recent communication in an effort to talk down longer-term rates.
"While there’s no arguing that the risks to BoC policy remain skewed toward easing, the backdrop just isn’t compelling for a move at present. The rebound from the wildfire will boost Q3 and we’re still waiting to see the impact of fiscal stimulus. That points to continued patience from Governor Poloz," said Benjamin Reitzes, Senior Economist at BMO Capital Markets.
Recovery of the oil price has helped the CAD to gain some ground against the USD. USD/CAD is extending declines from multi-month highs of 1.3280 hit on September 27th. The pair was 0.28 percent lower on the day at the time of writing, trading at 1.3086 at around 12:00 GMT.
