By Tzu-Wen Chen, THE TAKEAWAY: [Canadian GDP unexpectedly shrank in February] > [Decreases led by temporary mining shutdowns] > [ CAD tumbles vs. USD ] Canadian economic growth unexpectedly slowed in February as temporary shutdowns in mining and other good-producing industries impacted on production. Canada’s GDP slowed to an annualized rate of 1.6 percent in February, compared to January’s print of 1.7 percent. Monthly GDP growth also disappointed, with Canada’s GDP contracting by 0.2 percent in February, reversing the growth seen in the previous two months. The Canadian economy had grown by 0.1 percent in January and 0.5 percent in December after shrinking by 0.1 percent in November. Economists surveyed by Bloomberg News had expected Canada’s Gross Domestic Product (GDP) to expand by 2.1%. The month-on-month print also fell short of expectations, with the consensus forecast of economists calling for growth of 0.2 percent. According to a report released by Statistics Canada, the slowdown in economic growth was led by decreases in mining and oil and gas extraction, manufacturing and utilities, which outpaced advances in construction and wholesale trade. As mining closures are expected to be temporary, we could see Canada’s GDP pick up in the next month as impact from the shutdowns subside. USD CAD 1-minute Chart: April 30 , 2012 Chart created using Strategy Trader – Prepared by Tzu-Wen Chen The loonie tumbled against the greenback in the minutes following the release of the disappointing GDP print, falling as much as 37 pips against the U.S. dollar. At the time of this report, the USDCAD pair was trading at around C$0.9856. --- Written by Tzu-Wen Chen DailyFX Research
DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.