CAD Under Pressure as Flat GDP Reading Sparks Slowdown Concerns

The Canadian Dollar (CAD) remains under pressure after Canada's GDP reading came in flat at 0.0% in July, matching market expectations but slowing from the 0.4% growth recorded in June.

The data pointed to a slow start to the third quarter and ended three consecutive months of economic expansion.

Statistics Canada's preliminary estimate showed that the economy likely expanded by 0.2% in August, led by higher output in mining and retail trade.

The Bank of Canada (BoC) expects annualized growth of 1.5% in the third quarter.

The Canadian Dollar showed little reaction to the data, as diverging Federal Reserve (Fed) and BoC policy expectations and the widening gap between US and Canadian bond yields remain the main headwinds for the Loonie.