During the North American session the Canadian Dollar weakened against several of its most traded peers as lacklustre GDP data heightened concerns regarding the nation’s economic recovery.
The Canadian Dollar Exchange Rate was in the region of 0.6401 against the British Pound as of 15:10 GMT
While today’s reports showed that the US economy expanded by significantly more than forecast in the second quarter, the Canadian economy grew by 0.2 per cent in May.
Although this was better than April’s growth of 0.1 per cent it was less than the 0.3 per cent expected. Year-on-year Canadian GDP was up 1.6 per cent, in line with expectations.
The CAD/GBP exchange rate hit a high of 0.6430
Growth was led by buoyant consumer spending. Factors which weighed on the economy in the second quarter included declining oil and gas production output.
While this result wasn’t as good as hoped for, it still marked a fifth month of expansion – the longest run of month-on-month growth since 2010.
There are fears however that Canada may find it a challenge to post quarterly growth as strong as the gain recorded in the first three months of the year.
In response to the data one Toronto based industry expert commented: ‘The resource sector, which had been doing much of the heavy lifting over the last two or three quarters, may have run its course.’
The moderately disappointing result adds to the argument against the Bank of Canada raising interest rates. It now seems increasingly likely that new BOC Governor Stephen Poloz will have to hold rates for longer than expected.
As chief currency strategist Shaun Osborne observed: ‘It would suggest the economy is not performing as well as the Bank of Canada has been expecting, so that may increase expectations that policy stays on hold for even longer’.
Currency movement was a little stilted however as investors focus on the Federal Open Market Committee’s policy announcement, taking place at 19:00 GMT.
Current Canadian Dollar (CAD) Exchange Rates
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The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9692 <
The Canadian Dollar /Euro Exchange Rate is currently in the region of: 0.7327 >
The Canadian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6401 >
The Canadian Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0819 >
The Canadian Dollar /New Zealand Dollar Exchange Rate is currently in the region of: 1.2151 >
The Pound Sterling/Canadian Dollar Exchange Rate is currently in the region of: 1.5622 <
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0319 >
The Euro/Canadian Dollar Exchange Rate is currently in the region of: 1.3653 <
The New Zealand Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.8225 <
The Australian Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.9238 <
(Correct as of 15:30 GMT)
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