FX.co ★ Canadian Dollar Eases After GDP Data

The Canadian dollar edged closer to C$1.39 per USD, maintaining its proximity to a six-month peak, as the market absorbed the latest economic growth figures and evaluated policy directions under Prime Minister Mark Carney's narrowly held Liberal minority government. Canadian GDP saw an unexpected decline of 0.2% in February, largely due to a 2.5% drop in oil and gas production and a 0.5% decrease in construction. It is anticipated to post a modest 0.1% rise in March, indicating sluggish growth despite improvements in the mining and transportation sectors. Meanwhile, the Canadian Liberal Party clinched a fourth consecutive term, though by a slimmer margin than anticipated, slightly weighing on the loonie. Under Mark Carney’s leadership, the minority government’s agenda has centered on establishing trade agreements beyond the United States, emphasizing Canada’s negotiating strength. Concurrently, the Bank of Canada cautioned that unresolved US tariff threats could potentially push Canada into recession, while also suggesting a broader economic stagnation may persist if the trade conflict does not ease.