Canadian Dollar Falters on Stagnant Growth and US Dollar Strength
The Canadian dollar took a hit on Tuesday as the economy's growth stalled in July. According to Statistics Canada, the country's GDP remained flat for three consecutive months, with a 0.2% rebound anticipated for August due to mining and retail activity.
The manufacturing sector saw a 0.9% decline in July, while mining, quarrying, and oil and gas extraction fell by 0.5%. However, utilities and construction provided some offset with increases of 1.7% and 1.3%, respectively. Retail trade dropped 1%, while professional, scientific, and technical services rose 0.3%.
The Canadian dollar is facing renewed demand for the U.S. dollar due to increased bets on further Federal Reserve rate hikes and elevated energy prices linked to Middle East tensions. The greenback reached a two-month high against a basket of major currencies as markets grew more uncertain over inflation concerns.