The Canadian dollar tumbled against some of its major rivals to kick off the new month on Friday. The loonie fell on reports that economic growth slowed in the fourth quarter, and new data that found the nationâs current account deficit widened during the October-to-December period. The buck has had a rough start to 2019, and many analysts anticipate the pain to continue.
According to Statistics Canada, the Q4 gross domestic product (GDP) advanced at an annualized rate of 0.4%, down from 2.0% in the previous quarter. This is slower than the median estimate of 1.2%, which was driven by falling export prices of crude oil and crude bitumen.
In December, the GDP dipped 0.1% because of lower output in the manufacturing sector.
StatsCan further reported that the nationâs current account deficit widened in the last quarter to $15.48 billion, up from a revised $10.11 billion deficit in the July-to-September period. Falling energy prices were blamed for triggering a wider deficit on trade goods.
Traders will now look ahead to next week when the Bank of Canada (BOC) holds a policy meeting. The market mostly expects interest rates to be kept at 1.75%. The BOC has justified its rate pause by noting that its American counterparts has given the central bank room for patience. But the main thing for Governor Stephen Poloz is data, reaffirming his commitment to moving on rates based on the numbers.
On the data front, the balance of trade, housing, and employment data will be published throughout next week.
Crude oil futures had little impact on the loonie as April West Texas Intermediate (WTI) futures edged up just $0.15, or 0.26%, to $57.36 a barrel on the New York Mercantile Exchange. Oil remains a crucial fixture of Canadian exports, and the economy relies heavily on the performance of energy prices.
The USD/CAD currency pair jumped 0.46% to 1.3236, from an opening of 1.3173, at 14:31 GMT on Friday. The EUR/CAD advanced 0.63% to 1.5075, from an opening of 1.4978.
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Canadian Dollar Weakens on Q4 Slowdown, Current Account Gap
