Westpac Exits Bet on Canadian Dollar Rising Against Swiss Franc in July

Westpac Banking Corp. exited a bet that the Canadian dollar would rally to its strongest level this month against the Swiss franc after the loonie failed to break through a key level amid weaker-than-expected economic data.

“We had expected an oversold cross combined with a supportive trend in yield spreads to produce a decent bounce to 1.05,” Richard Franulovich, a senior strategist in New York, wrote in a client note. Canada’s currency “only managed to rally to just through 1.03 before reversing. The fatal shot was a result of weak Canadian data,” he said.

The Canadian dollar declined for a second day against its Swiss counterpart and was at 1.0085 franc as of 2:08 p.m. in London. The loonie hasn’t traded at 1.05 or stronger against its Swiss counterpart since June 29, according to Bloomberg data.

Canadian factory product prices dropped by the most in more than a year in June, a report showed today. The industrial product price index fell 0.9 percent in June from May, the most since May 2009, Ottawa-based Statistics Canada said. The median estimate in a Bloomberg survey of 13 economists was for a rise of 0.2 percent.

To contact the reporter on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net

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