The Canadian dollar pared losses against its US peer after a report showed that Canada’s economic growth in May was faster than expected, though USD/CAD reached the highest level in more than a month earlier. The loonie gained versus the euro and was flat against the Japanese yen.
Canada’s gross domestic product grew 0.4 percent in May, exceeding the consensus forecast of 0.3 percent. This was a fifth consecutive monthly expansion.
Most analysts believe that the loonie’s bounce against the greenback is nothing more than a normal market fluctuation during an established trend, not something trend-changing. Indeed, USD/CAD was slowly rising during July, and the pace of decline accelerated this week. The upward trend for the currency pair is likely to persist unless tomorrow’s US non-farm payrolls come out far worse than expected.
USD/CAD traded not far from its opening level of 1.0901 as of 21:38 GMT today after rising to 1.0929 intraday — the strongest price since June 9. EUR/CAD was down from 1.4607 to 1.4598. CAD/JPY was near the opening rate of 94.27.
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