News Column

Canadian Dollar Eases As Canadian Economic Growth Slows

May 30, 2014

CANBERA (Alliance News) - The Canadian dollar trimmed its early advance against its key counterparts in European deals on Friday, as the nation's economic growth slowed more-than-forecast in the first quarter.

Data from Statistics Canada showed that Canadian economy grew 1.2% on year in the first quarter, down from forecasts for a gain of 1.8%. The growth was also weaker than the revised 2.7% increase in the fourth quarter.

Gross domestic product rose 0.3% on a quarterly basis in the first quarter, following the 0.7% growth in the fourth quarter. That was the smallest increase since the fourth quarter of 2012.

On a monthly basis, the GDP edged up by 0.1% in March, matching forecasts.

Pulling away from early high of 93.94 against the yen, the loonie ticked down to 93.56 when the data was released. Further weakness may take the loonie to a support around the 93.00 zone.

The loonie weakened to 1.4793 against the euro, after reaching near 5-month high of 1.4728 at 7:05 am ET. If the loonie extends slide, it is likely to eye support at the 1.49 mark.

Reversing from an early 3-week high of 1.0820 against the greenback, the loonie dropped to 1.0866 shortly after the data. On the downside, 1.095 is seen as next support level for the loonie.

The loonie moved away from an early high of 1.0072 against the aussie, easing back to 1.0104. The loonie may face support at the 1.02 zone.

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Source: Alliance News

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