Canadian economic activity rises sequentially in July

Canadian economic activity rose in July. On a sequential basis, Canada’s GDP grew 0.2 percent. Gains were comparatively concentrated, as only 12 of 20 major industries increased their output in the month. Both the goods and services producing sides of the economy recorded growth. On the goods side, manufacturers led the charge, rising 1.2 percent. Non-durables manufacturing rose 2.4 percent in the wake of earlier maintenance shutdowns, while durables output were up 0.3 percent in July.

One soft spot was mining, quarrying and oil and gas, where it dropped 0.3 percent. A back-to-back fall in oil and gas extraction held back activity, owing mainly to a disruption at a major facility. Meanwhile, on the services side, wholesale trade rose 1.4 percent, while transportation rose 0.9 percent. The rebound in housing activity continues to make itself felt through real estate agents and brokers.

According to a TD Economics research report, economic growth might moderate after the second quarter’s impressive performance, but the growth might still be above-trend.

“Today's data gives us more confidence in our above-consensus tracking of 2.4 percent for Q3 growth (Q/Q, annualized)”, stated TD Economics.

With both growth and inflation likely to outpace the central bank’s expectations, BoC might hike interest rate during its October meeting.

At 14:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bullish at 154.545, while the FxWirePro's Hourly Strength Index of US Dollar was bullish at 95.1222. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex