Canada: Annualized Real GDP grows by 2.9% in Q3 vs. 3.5% expected

• Canadian economy grew at a much softer pace than expected in Q3.
• USD/CAD rose above 1.3500 with the initial reaction to the disappointing data. 

The real Gross Domestic Product (GDP) in Canada expanded at an annualized rate of 2.9% in the third quarter, Statistics Canada reported on Tuesday. This reading followed the 3.2% (revised from 3.3%) growth recorded in the second quarter and missed the market expectation of 3.5% by a wide margin. On a quarterly basis, the real GDP grew by 0.7%. 

"Growth in exports, non-residential structures, and business investment in inventories were moderated by declines in housing investment and household spending," Statistics Canada noted in its press release.

Market reaction

The USD/CAD pair shot higher with the initial reaction and it was last seen trading at its highest level since November 10 at 1.3525, gaining 0.2% on a daily basis.