BLBG: Loonie Falls to One-Month Low Against Greenback as Economic Growth Slows
Canada’s dollar dropped to a one- month low versus the greenback after a government report showed the nation’s economy expanded at a slower rate in the third quarter than economists forecast.
The loonie, as the Canadian currency is also known, dropped against the yen as the debt crisis in Europe and speculation China will increase interest rates discouraged demand for assets related to economic growth.
“Today’s weaker-than-expected Canadian GDP numbers magnified the risk-aversion theme and have triggered some follow-through selling of the Canadian dollar,” George Davis, chief technical analyst at Royal Bank of Canada’s RBC Capital Markets unit in Toronto, wrote via e-mail.
The Canadian currency depreciated 0.9 percent to C$1.0275 per U.S. dollar at 9:18 a.m. in Toronto, from C$1.0181 yesterday, after touching C$1.0287, the weakest level since Oct. 28. One Canadian dollar buys 97.33 U.S. cents. The loonie is down 0.8 percent in November.
Canada’s output growth slowed from July through September more than economists predicted as a loonie approaching parity with its U.S. counterpart restrained exports and boosted imports, giving the Bank of Canada more reason to keep interest rates unchanged into next year.
Gross domestic product in the world’s 10th biggest economy advanced at a 1 percent annualized third-quarter pace after revised gains of 2.3 percent and 5.6 percent in the previous two quarters. The median forecast of 26 economists in a Bloomberg News survey was for a 1.5 percent increase.
To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
