SF: Canada's Dollar Falls for Second Day as Risk Aversion Increases
Sept. 23 (Bloomberg) -- Canada's dollar weakened as investors shunned higher-yielding assets after an index showed growth in Europe is slowing, adding to concern about the sustainability of the global economic recovery.
Canada's currency fell for a second day and is down 0.8 percent over five days, the worst performer among the U.S. dollar's 16 most-traded counterparts. Reports this week showed inflation accelerated slower than forecast in August and retail sales unexpectedly fell in July.
"A dash of 'risk off' with the economic data out of Europe" is weighing on the Canadian dollar, David Watt, senior currency strategist at Royal Bank of Canada's RBC Capital Markets, said via e-mail.
The Canadian currency depreciated 0.4 percent to C$1.0349 per U.S. dollar at 7:57 a.m. in Toronto, compared with C$1.0308 yesterday, when it reached C$1.030, the weakest level in almost two weeks. One Canadian dollar buys 96.63 U.S. cents.
Growth in Europe's services and manufacturing industries weakened more than economists forecast in September. A composite index based on a survey of euro-area purchasing managers in both industries declined to 53.8 from 56.2 in August, London-based Markit Economics said today. Economists expected a reading of 55.7, according to the median of 15 forecasts in a Bloomberg News survey. A reading above 50 indicates expansion.
--With assistance from Emma Ross-Thomas in Madrid. Editors: Dave Liedtka, Paul Cox
