Though the bulk of the move came before Canadian data was even released, the Canadian dollar was the weakest of the majors on Monday as Canadian GDP was disappointing at Q2 -3.4 percent in Q2 compared to forecasts for a 3.0 percent drop. Even worse, Q1 GDP was revised down to -6.1 percent from -5.4 percent, marking the sharpest drop since record keeping began in 1961. According to Statistics Canada, increased purchases of motor vehicles pushed consumer spending higher, while a rebound in existing home sales provided a lift to the residential real estate market. On the downside, exports and business investment in machinery and equipment were both down, though not as sharply as in the first quarter. That said, with the Bank of Canada anticipating that growth will resume in Q3, the slight increase of 0.1 percent in June GDP appears to be a good start.
