The Canadian Dollar has fallen to its lowest level in more than a week against its US relation after China, the world’s second largest economy, posted worse-than-expected GDP leading to a decline in demand for Canadian commodity exports. The Chinese economy has seen its recovery unexpectedly stumble as its growth rate eased to 7.7%. Economists had been forecasting a rise of 8%.
The currency has weakened against the majority of its peers over speculation that slowing growth at home and abroad could force the Bank of Canada to lower its forecasts for economic growth at its next policy meeting, due to be held on April the 17th.
The latest decline follows on from the sharp decline the ‘Loonie’ suffered last week after economic data showed that retail sales in Canada’s biggest trading partner the USA made an unexpected contraction.
According to the chief economist at the Canadian unit of HSBC holding PLC David Watt the weakness has not been helped by a general feeling in the markets that the global economic recovery is faltering.
He said; “The retail-sales number and some other data coming out of the US recently suggests the US economy is starting to lose some traction. The Chinese number not hitting that 8%, and if anything it swung down a bit on the near basis, I think just erased some of this sentiment that the global economy is gaining traction. To the extent this represents a slowdown in the global economy, I think it hits Canada.”
Currently the CAD/USD currency pair is trading in the region of 0.98.
Comments are closed.