Canadian Dollar Drops to Six-Month Low as Economic Growth Stalls

The Canadian dollar slumped to a six-month low after reports showed economic growth stalled in July.

The loonie, as the Canadian dollar is called for the image of the aquatic bird on its C$1 coin, extended its longest streak of losses in two months as a drop in oil and gas production offset manufacturing gains and weighed on the economy.

“What we had was a disappointment and some signs that the third quarter is off to a softer-than-expected start,” said Camilla Sutton, head of currency strategy at Bank of Nova Scotia. “From a currency perspective, that has proven a weight.”

Canada’s currency fell 0.4 percent to C$1.1205 per U.S. dollar as of 1:39 p.m. in Toronto, touching C$1.1220, the weakest since March 24. One Canadian dollar buys 89.25 U.S. cents. The loonie is down 3 percent this month, poised for the worst performance since January.

Canadian gross domestic product, which expanded 0.3 percent in June, was little changed in July, Statistics Canada said today. That compares with the median estimate of 18 analysts surveyed by Bloomberg News before the release for another 0.3 percent expansion.

The economy grew 2.5 percent in July from a year earlier, down from 3.1 percent in June, the data show.

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