Canada's July GDP was a touch stronger than expected

Canada's July GDP was a touch stronger than expected - rising 0.34%m/m (cons 0.2%, June revised down by 0.1ppt). As expected, mining, oil & gas and manufacturing were strong contributors. It confirms Canada's momentum heading into Q3. While there is a high risk of further cuts to 2016 energy capex, the rest of the Canadian economy seems to have decent momentum and that should be enough to keep the BoC on the sidelines for now. A 2.5%q/q ann. growth is expected for Q3 and the BoC will have to revise up its Q3 forecast in its Oct 21 MPR (currently sitting at 1.5%q/q ann). 

"We still think USD/CAD has room to make new highs (targeting 1.36) but would see this as the final stage of the 3yr uptrend. We like long CAD against other commodity currencies (short AUD/CAD)", notes RBC Capital Markets.