The Canadian dollar dropped today as nation’s economic growth slowed, leading to speculations that the central bank will not be able to tighten the monetary policy in the near future. The currency managed to advances versus the Japanese yen.
Canadian gross domestic product expanded 0.1 percent in April, slower than in March (0.2 percent). It was the fourth consecutive monthly increase. The slowdown made investors question if the Bank of Canada has scope for raising interest rates or talks about withdrawal of stimulus were just that: talks.
The loonie was under pressure, as well as other commodity currencies, from concerns about possible reduction of monetary accommodation by the Federal Reserve. Yet prices for crude oil, the chief source of export revenue for Canada, were rising, providing some form of support for the Canadian currency.
USD/CAD rose from 1.0473 to 1.0509 as of 19:49 GMT today, while its daily high was at 1.0551. EUR/CAD advanced from 1.3657 to 1.3676, but retreaded from the intraday maximum of 1.3733. At the same time, CAD/JPY went up from 93.84 to 94.35.
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Canadian Dollar Falls as GDP Growth Slows
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