Canada’s dollar depreciated for a third day versus its U.S. counterpart, falling to the lowest in more than a year, on concern a slowdown in the global economy will crimp exports and weaken the nation’s balance sheet. The currency was headed for weekly, monthly and quarterly losses even after a report showed Canada’s gross domestic product rose for a second month in July on gains in manufacturing and wholesaling. Investors sold the Canadian dollar for U.S. currency to rebalance portfolios that have lost value due to equity declines, according to Steve Butler of Scotia Capital “It’s been a rough month and quarter for the markets,” said Butler, managing director of foreign-exchange trading at in Toronto in the Bank of Nova Scotia unit, in an e-mail message. “A lot of portfolio rebalancing is hurting the Canadian dollar.” The Canadian currency dropped 1 percent to C$1.0457 per U.S. dollar at 9:47 a.m. in Toronto, compared with C$1.0359 yesterday. It touched C$1.0467, the weakest level since Sept. 8, 2010. One Canadian dollar buys 95.58 U.S. cents. Canada’s currency is headed for a 1.8 percent drop this week versus the greenback, the third-worst performance among the world’s 16 most-traded currencies after New Zealand’s dollar and the Mexican peso. It’s down 6.5 percent this month and 7.9 percent in the quarter. Dollar Paths “The U.S. dollar benefits and the Canadian dollar suffers from the twin drags of ongoing worries about global growth and weakness in equity markets,” Shaun Osborne and Greg Moore, foreign-exchange strategists at Toronto-Dominion Bank in Toronto, wrote in a client note today. “The U.S. dollar’s clear push through the upper C$1.02 area this week puts C$1.0800 to C$1.0850 on the radar,” the strategists wrote. “We look for intraday support at C$1.0400 to C$1.0410.” Support refers to the lower boundary of a trading range where buyers may emerge. Butler said his target for the currency is C$1.0640 to C$1.0650. He recommended exiting long positions if the pair falls back below C$1.0320. A long position is a bet that a currency will appreciate, in this case the U.S. dollar. Government bonds rose, pushing the 10-year note’s yield lower by seven basis points, or 0.07 percentage point, to 2.15 percent. Yields rose for five straight days after dropping to a record low 1.994 percent on Sept. 23. The price of the 3.25 percent security maturing in June 2021 gained 59 cents to C$109.54. Canada’s government bonds have made 7.5 percent this year, according to a Bank of America Merrill Lynch index. Economic Growth Canada’s dollar remained lower after the government’s statistics agency reported gross domestic product rose 0.3 percent to C$1.26 trillion ($1.21 trillion) in July on a seasonally adjusted basis, matching the median estimate in a Bloomberg survey with 23 responses. The first monthly report on output for the third quarter suggests the economy has resumed growth after shrinking in the April-to-June period. Economists surveyed by Bloomberg last month predict a third-quarter annualized growth rate of 2 percent, averting a recession. To contact the reporter on this story: Chris Fournier in Halifax, Nova Scotia at cfournier3@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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