The monthly GDP growth rate in Canada reached 0.7 per cent in January, beating the initial market expectations for a more moderate economic expansion of 0.5 per cent. The report was published by Statistics Canada.
This performance marks a sizable rebound in economic activity from December when Canada's economy barely expanded by 0.1 per cent. It is also the ninth consecutive month of growing GDP.
Even though Canada's economy continues to reel from the initial coronavirus crash of last year, it remains on track to achieving solid recovery. Similarly positive GDP numbers were already reported in the U.S. and in the U.K. The global pickup in growth resonates with the recent remarks of Kristalina Georgieva, Managing Director of the IMF:
The global economy is on firmer footing. But prospects are diverging dangerously between and within countries.— Kristalina Georgieva (@KGeorgieva) March 30, 2021
We must give everyone a fair shot: to end the pandemic, and build a better future for vulnerable people and countries. My Curtain Raiser speech:https://t.co/xpTd6LrNjE pic.twitter.com/xWa3xIJqGF
The general economic situation in Canada continues to stabilise, despite weaker-than-anticipated inflationary growth. This is mainly elucidated by improving employment conditions in the labour market.
Meanwhile, the Canadian dollar is still giving way to the strengthening U.S. dollar. As can be seen on the 4H chart below, the USDCAD has already consolidated above the major resistance-turned-support area (in blue).
Despite the minor bearish crossover in the underlying market momentum, as underpinned by the MACD indicator, the primary outlook continues to be prevailingly bullish.
This is further substantiated by the fact that the 50-day MA (in green) has once again crossed above the 100-day MA (in blue) and is currently serving the role of a floating support.