BLBG: Canadian Dollar Pares Gains After Reports Show Slower Economic Growth
The Canadian dollar pared gains against its U.S. counterpart after reports showed economic growth in Canada and the U.S. slowed more than expected.
“Canada is pretty stable this morning,” Steve Butler, director of foreign-exchange trading in Toronto at Bank of Nova Scotia’s Scotia Capital unit, said.
The Canadian currency gained 0.1 percent to C$1.0358 per U.S. dollar at 09:14 a.m. in Toronto after touching C$1.0310. It closed yesterday at C$1.0371. One Canadian dollar buys 96.51 U.S. cents.
Canada’s GDP expanded 0.1 percent in May after stalling the month before, with mining and oil leading increased goods production, while wholesale and real estate activity declined.
The nation’s economic output rose to a seasonally adjusted annual rate of C$1.23 trillion ($1.19 trillion) in May, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News predicted a 0.2 percent gain, based on the median of 22 estimates.
Canada’s annual growth rate probably slowed to 3 percent in the second quarter from a decade-high pace of 6.1 percent between January and March, when low mortgage rates and temporary tax credits sparked spending, the Bank of Canada said July 22. The economy’s growth of 3.5 percent this year will still lead the U.S., the euro zone and Japan on consumer and government spending, the bank said.
Gain for Month
The Canadian dollar, known as the loonie for the aquatic bird on the one-dollar coin, is poised for a 2.6 percent gain against the greenback in July and has risen 1.6 percent this year, according to Bloomberg data.
Growth in the U.S. slowed to a 2.4 percent annual rate in the second quarter, less than forecast, reflecting a larger trade deficit and cooler consumer spending.
The increase in gross domestic product compared with a median forecast of 2.6 percent of economists surveyed by Bloomberg News and follows an upwardly revised 3.7 percent pace in the first quarter that showed a jump in inventories, according to figures from the Commerce Department in Washington. Business investment climbed at the fastest rate since 1997.
Futures on the Standard & Poor’s 500 Index expiring in September fell 0.8 percent to 1,087.4 at 8:31 a.m. in New York.
