Canadian Dollar Extends Fall As Economy Contracts
31 January 2015 - 1:34AM
RTTF2
The Canadian dollar extended weakness against its major
opponents on Friday, as Canadian economic growth turned negative in
November, due to declines in manufacturing, mining, and oil and gas
extraction.
Data from Statistics Canada showed that GDP fell by 0.2 percent
in November, following a 0.3 percent advance a month earlier. The
growth was expected to be flat on month.
Annually, the economy grew 1.9 percent, less than the 2.1
percent rise expected by the economists. The GDP growth was 2.3
percent in October. The annual rate was the slowest since March
2014.
The Bank of Canada last week cut its benchmark interest rate to
0.75 percent from 1.0 percent, due to the implications of lower oil
prices. Since the country relies heavily on oil exports for growth,
the rate cut would help to offset the "instability" caused by
plunging oil prices, the BoC governor Stephen Poloz said.
Sliding prices for oil, copper and gold have arose speculation
that the central bank might cut its overnight rate by another
quarter percent again.
The loonie declined to 1.2797 against the greenback, a level
unseen since March, 2009. Continuation of the loonie's bearish
trend may lead it to a support around the 1.30 zone. The pair ended
yesterday's trading at 1.2615.
The loonie moved down to 91.73 versus the Japanese yen for the
first time since March 2014. The loonie-yen pair was valued at
93.71 when it closed deals on Thursday. Next key support for the
loonie may be located around the 90.00 mark.
The Canadian currency slipped to a 1-1/2-month low of 1.4489
against the euro, compared to Thursday's closing value of 1.4280.
The next likely support for the loonie is seen around the 1.46
region.
Reversing from an early high of 0.9788 against the aussie, the
loonie hit a 2-day low of 0.9907. The loonie is possibly seen
finding support around the 1.00 level. At Thursday's close, the
pair was quoted at 0.9793.
Looking ahead, Reuters/University of Michigan's final consumer
sentiment index for January is due shortly.
US Dollar vs CAD (FX:USDCAD)
Forex Chart
From Apr 2024 to May 2024
US Dollar vs CAD (FX:USDCAD)
Forex Chart
From May 2023 to May 2024