Signs of Canadian Economy’s Weakness Push Loonie Down

The Canadian dollar fell today as the macroeconomic data slashed the forecasts for Canada’s economic expansion and curbed the demand for the Canadian currency. This month can become the worst month for the loonie since May 2010.
The Canadian economy, which was previously considered very stable, continues to show the signs of weakness. The current account deficit widened by $2.6 billion to reach C$11.0 billion in the second quarter, compared to the forecast value of C$10.2 billion. The Industrial Product Price Index (IPPI) rose 0.1 percent in July, following the 0.9 percent decline earlier. The predicted value was 0.5 percent.
The loonie was also weakened by the influence from beyond Canada, specifically the decline of the equities and crude oil, two main drivers of the Canadian currency. The Standard & Poor’s 500 Index went down 0.8 percent. October futures for crude oil delivery fell 0.7 percent to $74.67 per barrel.
USD/CAD went up from 1.0500 to 1.0595 today as of 22:26 GMT after declining previously to 1.0470. EUR/CAD traded near 1.3425, following the drop to 1.3317.

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