"For the first time in a long time, we are feeling more optimistic about our forecast, even though we have revised growth down for both Canada and the United States this year. Taken together, the risks suggest a more balanced economic forecast".
- Jean-François Perrault, Scotiabank
Canadian manufacturing sales rose markedly in August, suggesting that economic growth rebounded in the Q3. Statistics Canada announced on Tuesday manufacturing sales grew 0.9% on a seasonally adjusted monthly basis in August, hitting $51.12 billion and following the preceding month's 0.1% increase. Market analysts anticipated a slight acceleration of 0.3% during the reported period. Sales rose in 15 out of 21 industries, accounting for 69% of the Canadian manufacturing sector. In volume term, manufacturing sales advanced 1.2% in the eight month of the year. Sales in the food manufacturing industry climbed 1.7% to a record high of $8.57 billion in August, while sales in the primary metals industry increased 3.6% to hit $3.89 billion. Sales of transportation equipment fell 1.1% to $10.55 billion. A report showed more signs of economic upturn following the devastating wildfires in Alberta.
After the release, the Canadian Dollar rose slightly against its US counterpart, trading around 1.3080. The Bank of Canada will hold its October policy meeting on Wednesday. Analysts are expecting the Central bank to keep its key interest rate unchanged at 0.50%. Canada's CPI data is scheduled to be released on Friday.
© Dukascopy Bank SA