This morning’s economic data still showing signs of growth, as vaccinations grow, further government spending and announcements such as the City of New York, fully opening July Ist. Gross domestic product, the sum of all goods and services produced in the economy, jumped 6.4% for the first three months of the year on an annualized basis. Outside of the reopening-fueled third-quarter surge last year, it was the best period for GDP since the third quarter of 2003. While economists had forecasted slightly higher, it is still positive news, the U.S. consumer is still in the driver’s seat and it will likely the U.S. economy on a would trip.
The Canadian dollar has benefitted from this growth as commodities, basically on all fronts have jumped significantly year over year, the problem now is that has Canadian goods become too expensive? Commodities are generally priced in USD, but Canadian exports are usually in CAD and this means that these products can become too expensive. The Bank of Canada may have to reassess it interest rate policy if the USDCAD goes below 1.2000, it is now walking on a wire that is getting finer and finer each passing week.