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Canada GDP beats expectations as US tariff reprieve offers brief relief
The Q2 report showed broad-based growth, including a 12.7% annualized jump in business investment, supporting a view that the Bank of Canada may stay on hold in September.
Action Forex says markets received some breathing room after the U.S. delayed planned 50% tariffs on select Canadian goods by three days, while Canada and the U.S. continue trade talks.
According to the outlet, Tuesday’s Q2 Canadian GDP data backed up the idea that the economy has been resilient despite the broader trade uncertainty, with growth rising 3.3% annualized in the second quarter.
The report also highlighted the composition of the beat, pointing to strength in exports, business investment, and household spending, with inventory drawdowns moderating.
Action Forex added that it expects the Bank of Canada to likely remain on hold at its next meeting in September, citing survey evidence that businesses have grown more comfortable with capital spending plans even as household demand faces uncertainty from softer labor conditions and elevated household debt.