FX.co ★ Canadian Dollar Halts Decline After GDP

By late September, the Canadian dollar stabilized at approximately 1.394 per US dollar, ending its previous decline that brought it to a four-month low. This stabilization was influenced by domestic economic indicators and a moderation in US inflation, which helped to rein in the currency's downward trend and steady the demand for Canadian assets. Statistics Canada's preliminary data indicated that in August, the nation's real GDP remained largely unchanged. Gains in wholesale and retail sectors were sufficient to counterbalance setbacks in mining, manufacturing, and transportation, thereby alleviating immediate growth concerns that had negatively impacted the Canadian dollar. Furthermore, GDP growth for July was revised upward to a 0.2% monthly increase from an earlier estimate of 0.1%, marking the strongest growth since January and suggesting that economic activity hasn't significantly declined. Concurrently, data on the US Personal Consumption Expenditures (PCE) for August revealed only modest increases in both headline and core inflation rates. This development weakened the US dollar rally and eased the upward pressure on the USD/CAD exchange rate, contributing to the Canadian dollar's stabilization.