Canada Dollar Little Changed After Growth Trails ForecastAri Altstedter and Andrea Wong
Canada’s dollar was little changed at almost a five-month high versus its U.S. counterpart after fluctuating as data showed the nation’s economy grew less than forecast in April.
The currency fell versus 12 of its 16 major peers. The report on gross domestic product supported comments from the Bank of Canada that a gain in inflation is transitory rather than a sign the economy is heating up, damping bets the central bank might signal a need for higher interest rates. Data earlier this month showed consumer prices climbed in May more than forecast.
“Given the increasing signs of mounting pressure on the Canadian dollar, the GDP number doesn’t necessarily mean a meaningful move lower,” said Omer Esiner, chief market analyst in Washington, D.C., at Commonwealth Foreign Exchange Inc., a currency brokerage.
The loonie, as the currency is nicknamed for the image of the aquatic bird on the C$1 coin, traded at C$1.0671 per U.S. dollar at 5 p.m. in Toronto. It weakened as much as 0.3 percent to C$1.0697 and appreciated 0.2 percent to C$1.0647, the strongest since Jan. 6. One Canadian dollar purchases 93.71 U.S. cents.
The currency has climbed from a 4 1/2 year low of C$1.1279 it reached on March 20. It gained 1.6 percent in June, rallying for a fifth month in the longest winning streak since 2007. It rose from March 31 through this month for the first time in three quarters, advancing 3.6 percent, the most since 2010.
Canada’s economy grew 2.1 percent in April from a year earlier, matching a 2.1 percent gain the previous month, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg forecast a 2.3 percent expansion.
Gross domestic product rose 0.1 percent in April from the prior month compared to a 0.1 percent month-to-month gain the previous period. Economists had forecast a 0.2 percent increase in a survey with 11 responses.
The consumer price index rose 2.3 percent from a year earlier, Statistics Canada reported June 20. It was the first time the gauge exceeded the Bank of Canada’s 2 percent inflation goal since February 2012.