Data showing that the economy expanded in May failed to temper fears that growth is lagging behind that of the country's largest trading partner, the U.S., leading Canada's dollar to drop to its weakest level in nearly two months.
According to the Future Currency Forecast, reports showed that the Canadian economy expanded by 0.4 percent in May, month-on-month, following April's growth of 0.1 percent.
Amid bets it had dropped too far, too quickly, the loonie later erased losses It fell for the first time since January even as the government said Canadian gross domestic product increased 2.3 percent from a year earlier, in tune with a Bloomberg forecast. Data recently showed the American economy rose 4 percent at an annual rate in the second quarter, reports Bloomberg.
Martin Schwerdtfeger, a currency strategist at Toronto-Dominion Bank's TD Securities unit in Toronto, said in a phone interview with Bloomberg, "Initial jobless claims in the U.S. is signaling a relatively good reading for tomorrow's nonfarm payrolls. The Canadian GDP print came on consensus."
On Thursday, the pound to Canadian dollar exchange rate fell slightly, but managed to hover above the day's low of 1.8392. The U.S. dollar to the loonie exchange rate advanced to a high of 1.0929.
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