Canadian economic output rises above expectations in January

Canadian economic output rose 0.3 percent sequentially in January, surpassing market expectations of a rise of 0.1 percent. The breadth of the climb was strong, as output was higher in 18 of 20 major industries. The only real impediment to growth was the mining, quarry, and oil and gas extraction sector. Energy production curtailments in Alberta sent output 3.1 percent lower, helped by falls in the mining sector, and non-metallic mining in particular.

This fall was more than counter elsewhere on the goods producing side. Solid gains in construction, and manufacturing sent output among the aggregate goods-producing group up 0.6 percent sequentially.

Output among the services industries as a whole was strong, rising 0.2 percent in January. The biggest contributors were wholesale trade and real estate. However, it was a strong month throughout the board, with only accommodation and food services in decline.

“Our tracking now stands pretty much in line with the Bank of Canada's 0.8% read (from January). This would still be a roughly on-trend print once the impact of the oil sector is taken into account. As a result, we still see little in the way of fundamental inflationary pressures that would stir action from the Bank of Canada. As discussed in our latest Market Insight, at 1.75% the current level of the policy rate is right at its 'neutral' position (neither too accomodative or restrictive), so we expect to be here quite a while”, said TD Economics.

At 15:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was slightly bullish at 61.8311 while the FxWirePro's Hourly Strength Index of US Dollar was slightly bullish at 59.6514 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex