- Canada’s economic system grew at an annual charge of two.2% in Q1.
- USD/CAD trades marginally decrease on the day under 1.3800.
Canada’s actual Gross Home Product (GDP) grew by 0.5% on a quarterly foundation within the first quarter, Statistics Canada reported on Friday. This studying matched the 0.5% growth recorded within the final quarter of 2024.
The actual GDP expanded at an annual charge of two.2% within the first quarter, surpassing analysts’ estimate for a 1.7% progress.
“Complete exports rose 1.6% within the first quarter of 2025 after rising 1.7% within the fourth quarter of 2024,” the press launch learn. “Within the context of looming tariffs from america, exports of passenger automobiles (+16.7%) and industrial equipment, tools and elements (+12.0%) drove the general improve in exports within the first quarter of 2025.”
Market response
USD/CAD edges barely decrease following this report and was final seen shedding 0.15% on the day at 1.3788.
GDP FAQs
A rustic’s Gross Home Product (GDP) measures the speed of progress of its economic system over a given time period, often 1 / 4. Essentially the most dependable figures are people who examine GDP to the earlier quarter e.g Q2 of 2023 vs Q1 of 2023, or to the identical interval within the earlier 12 months, e.g Q2 of 2023 vs Q2 of 2022.
Annualized quarterly GDP figures extrapolate the expansion charge of the quarter as if it have been fixed for the remainder of the 12 months. These could be deceptive, nevertheless, if momentary shocks influence progress in a single quarter however are unlikely to final all 12 months – reminiscent of occurred within the first quarter of 2020 on the outbreak of the covid pandemic, when progress plummeted.
The next GDP result’s usually constructive for a nation’s forex because it displays a rising economic system, which is extra prone to produce items and companies that may be exported, in addition to attracting larger international funding. By the identical token, when GDP falls it’s often detrimental for the forex.
When an economic system grows individuals are inclined to spend extra, which ends up in inflation. The nation’s central financial institution then has to place up rates of interest to fight the inflation with the aspect impact of attracting extra capital inflows from international buyers, thus serving to the native forex respect.
When an economic system grows and GDP is rising, individuals are inclined to spend extra which ends up in inflation. The nation’s central financial institution then has to place up rates of interest to fight the inflation. Greater rates of interest are detrimental for Gold as a result of they improve the opportunity-cost of holding Gold versus inserting the cash in a money deposit account. Due to this fact, the next GDP progress charge is often a bearish issue for Gold value.
