After five consecutive quarters of positive growth, Canada’s GDP stalled during the final quarter of last year. A decline in business investment in machinery and equipment, coupled with slower inventory accumulation, were the primary reasons for the pullback. Markets had been expecting an increase of around 1.6% for Q4. In terms of GDP numbers, this is a significant miss. The stalling GDP numbers are only the latest economic data point to indicate that Canada’s economy is weakening. This provides the Bank of Canada the assurance it needs to stand pat on interest rates next week.
The Canadian dollar was trading at 1.3620 versus the USD (73.41 U.S. cents) but stopped short of going below the seven-week low it hit on last Friday at 1.3665. Overall, the Canadian dollar was down 2.3 percent in the month of February against the US dollar.
