Canadian Dollar Advances as Current-Account Deficit Narrows

The Canadian dollar advanced today against its US peer as the nation’s current-account deficit shrank last quarter, adding to speculations that the central bank may raise interest rate in the future. The currency declined versus the euro.
The Canadian current-account shortage narrowed by C$0.5 billion to C$14.1 billion in the first quarter of 2013. Analysts have expected an increase. The positive data added to evidences that the Bank of Canada can withdraw some stimulus without hurting the economy.
The loonie was especially strong against the greenback, which was weakened by negative macroeconomic reports from the United States. The Canadian currency also trimmed its losses versus the euro, but was unable to erase the drop completely.
USD/CAD was down from 1.0348 to 1.0302 as of 19:22 GMT today. EUR/CAD traded at 1.3440 after rallying from 1.3389 to 1.3502 — the highest since April 17. CAD/JPY ticked up from 97.68 to 97.87.

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