You are here
Canadian dollar hits 19-month low as risk aversion offsets GDP gain
THE Canadian dollar fell to a 19-month low against its broadly stronger US counterpart on Friday, as declines for stocks and the price of oil offset data showing stronger-than-expected growth in the domestic economy.
At 2100 GMT on Friday, the Canadian dollar was trading 0.7 per cent lower at 1.3598 to the greenback, or 73.54 US cents. The currency touched its weakest level since May 2017 at 1.3601. For the week, the loonie was down 1.6 per cent, its biggest drop since June.
"We are seeing an extremely orderly move but a weakening Canadian dollar, as would be expected with lower oil prices and deteriorating risk appetite," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York.
Wall Street stocks fell in volatile trading amid concerns of slowing growth and a looming US government shutdown.
Canada exports many commodities, including oil, and runs a current account deficit, so its economy could be hurt if the global flow of trade or capital slows. The price of oil extended its recent drop as global oversupply kept buyers away from the market ahead of upcoming holidays. US crude oil futures settled 0.6 per cent lower at US$45.59 a barrel.
Still, the loonie performed better than most other G-10 currencies.
Speculators have cut their bearish bets on the Canadian dollar for the second straight week, data from the US Commodity Futures Trading Commission and Reuters calculations showed.
Canada's economy expanded at a faster-than-expected 0.3 per cent pace in October, but evidence of economic momentum heading into the end of the year may not be enough to shift the Bank of Canada from the sidelines due to the recent slump in oil prices. REUTERS