China’s GDP Spurs Speculation About Stimulus, EUR/CAD at Record Low

The Canadian dollar climbed against most major currencies as the slowing growth in China spurred speculations that the policy makers in the Asian nation would step up to boost the economic expansion. The currency reached the record high versus the euro.

China’s gross domestic product expanded 7.6 percent in the second quarter of this year, somewhat below the expectations of a 7.7 percent increase. The expansion in the preceding quarter was 8.1 percent. The slowdown spurred speculations that China may stimulate the economy, helping riskier assets. Yet some analysts say that the growth figure was above the worst forecasts and may be not enough to spur the Chinese authorities into action.

Whatever the futures hold, traders were certainly optimistic about it. The Thomson Reuters/Jefferies CRB Index, which tracks 24 commodities, climbed 1.3 percent yesterday. The Standard & Poor’s 500 Index added as much as 1.7 percent.

EUR/CAD fell from 1.2432 to close at 1.2415 and it reached the record low of 1.2376 intraday. USD/CAD fell from 1.0191 to 1.0136. CAD/JPY closed at 78.07, up from the opening of 77.78.

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