CAD rises against USD as Canadian GDP beats expectations

Published: Tuesday, 30 April 2013 15:00 BST - Written by James Fuller

STORY LINK CAD rises against USD as Canadian GDP beats expectations

The Canadian Dollar has hit a two-week high against its US relation after Canadian economic growth beat economist expectations.

The ‘Loonie’ has risen by 0.3% against the US Dollar after Statistics Canada reported that the nation’s Gross Domestic Product grew by 0.3% by a month by month basis. A figure that was better than the 0.2% rise economists had been expecting.
On a year by ea basis the data means that the Canadian economy grew by 1.7%.

The currency could rise further against the ‘Greenback’ as economists await the outcome the two-day US Federal Reserve meeting. The markets have become increasingly convinced that the US Central Bank will not show any signs that it is about to end its programme of monetary easing.

The Fed has said it plans to keep its key short-term interest rate near zero at least until the unemployment rate dips below 6.5 per cent from its current 7.6 per cent.
It’s also been buying US$85 billion a month in Treasuries and mortgage bonds to try to keep long-term borrowing rates down, a move known as quantitative easing.

The currency was also supported after data revealed that due to the ‘Loonie’s’ weakness against the US Dollar over the past few months Canadian producer prices climbed 0.1 percent in March from February as the Canadian dollar weakened against its U.S. counterpart, lifting prices for motor vehicles and other exports.

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