FX.co ★ Canadian Dollar Strengthens Toward 7-Month High

The Canadian dollar has strengthened beyond the 1.38 mark against the USD, nearing the seven-month high of 1.37 reached on May 26th. This movement is attributed to strong economic data that has led markets to reconsider the extent of rate cuts by the Bank of Canada. In the first quarter, Canada's GDP grew at an annualized rate of 2.2%, significantly surpassing the projected 1.7% increase. Although much of this growth was due to robust exports and inventory stockpiling ahead of impending US tariffs, it also aligns with other indicators of a resilient Canadian economy. Notably, retail sales have seen substantial increases for the second consecutive month. Furthermore, prospects for a less dovish stance from the Bank of Canada were bolstered by April's unexpectedly high trimmed-mean core inflation rate, which reached its highest point in a year.