Investing.com - The Canadian economy stalled in June, dampening expectations for another interest rate increase by the country’s central bank as soon as next week.
Canada’s gross domestic product, or the broadest measure of goods and services produced in an economy, was flat in June Statistics Canada reported.
The result missed economists’ expectations for growth of 0.1%. In the previous month, gross domestic product expanded 0.5%.
The economy grew by a slightly slower than expected 2.9% in the three month to June, following an upwardly revised expansion of 1.4% in the first quarter.
On a year-over-year basis, the Canadian economy advanced 2.4% in June.
The data dampened expectations for the Bank of Canada to raise interest rates at its upcoming meeting next week.
The BoC hiked rates by a quarter point in July, to 1.50%, marking the fourth such increase since the summer of 2017.
The central bank said at the time that it anticipates growth to average around 2% over the three years ending in 2020, as business investment and exports grow.
The bank also said it was monitoring a trade dispute with the U.S., but added that it expected the impact of tariffs on Canadian steel and aluminum to be modest.
Investors were continuing to monitor trade developments on Thursday, amid hopes that Canada will join the new trade agreement between the U.S. and Mexico aimed at overhauling the North American Free Trade Agreement ahead of a Friday deadline.
The Canadian dollar fell to the day's lows following the report, with USD/CAD rising 0.4% to 1.2963 by 08:42 AM ET (12:42 GMT), from around 1.2931 earlier.