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CAD bulls received a further boost this week as the Bank of Canada’s Autumn Business Outlook Survey painted a positive picture. The latest update highlighted strong economic activity (even ahead of the NAFTA breakthrough) with solid demand, investment and employment intentions keeping the indicator around record levels.
The key takeaways from the indicator survey are:
1 – Strong retail sales
The indicator’s measure of future sales growth showed an increase from the prior reading in July reflecting the fact that strong US activity is likely to bolster Canadian growth throughout the rest of the year and into next. In the longer run, however, there is the likelihood that US growth will ease off as higher borrowing costs start to constrain capital flow and the government’s fiscal boost begins to weaken. For now, though, the strength in Canadian spending is fuelling a rebound in the survey’s investor indicator.
2 – Labour shortages remain
While Canadian wage growth has been slow over the s...
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