TORONTO — The Canadian dollar weakened
against its broadly stronger US counterpart on Friday as oil
prices fell and domestic data showed that economic growth likely
flatlined in September.
The loonie was trading 0.4% lower at 1.2389 to the
greenback, or 80.72 US cents. The currency traded in a range
of 1.2329 to 1.2392 and was on track to dip 0.2% for the week.
A preliminary estimate from Statistics Canada showed that
GDP was unchanged in September following a weaker-than-expected
gain of 0.4% in August. Economists had expected a gain of 0.7%.
Third-quarter annualized GDP likely rose 1.9%, Statistics
Canada said. That would be much less than the Bank of Canada
forecast at a policy announcement on Wednesday.
The central bank’s surprise warning about an early interest
rate lift-off could douse a housing boom fueled by cheap debt.
The price of oil, one of Canada’s major exports, fell as
rising US inventories and the prospect of more Iranian exports
countered expectations that OPEC and its allies will keep supply
US crude prices declined 1.3% to $81.77 a barrel,
while the US dollar gained ground against a basket of major
currencies as the European Central Bank’s dovish tone at a
policy meeting on Thursday weighed on the euro.
Canadian government bond yields were higher across the
curve, tracking the move in US Treasuries.
The 10-year was up 1.4 basis points at 1.687%,
after touching on Thursday its highest intraday level since
December 2019 at 1.729%.
(Reporting by Fergal Smith; Editing by Andrea Ricci)