The Canadian dollar rose yesterday amid returning risk appetite, but trimmed its gains as Canada’s economy unexpectedly shrank in August. Today, the currency remained almost flat, waiting for more news to give it direction.
Canada’s gross domestic product declined 0.1 percent in August, frustrating economists who expected it to grow with the same rate of 0.2 percent as in July. That was the first decline since February. The negative data added to doubts that the Bank of Canada will increase its interest rates.
The loonie currently trades near the lowest level since the beginning of August against the US dollar and it looks like the Canadian currency may fall even further. On the positive note, the Canadian dollar gained versus the yen yesterday and maintained its gains today.
USD/CAD rose from 0.9991 to 1.9999 as of 2:15 GMT today. EUR/CAD advanced from 1.2948 to 1.2964. At the same time, CAD/JPY went higher from 79.78 to 79.92.
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