Canada Dollar Declines for a 3rd Week as Economic Growth Stalls
Canada’s dollar depreciated for the third straight week, the longest string of losses since August, as a rally in higher-risk assets faded, stoking demand for havens such as the yen, U.S. dollar and Swiss franc.
The currency touched the lowest level this month yesterday, reflecting diminished confidence in the nation’s economy after reports during the week on retail sales and consumer prices trailed median forecasts. Futures trading shows a reduced likelihood of interest-rate increases. Canadian Finance Minister Jim Flaherty will present the government’s budget on March 29.
“The Canadian dollar has been underperforming against its major counterparts,” said David Song, a currency analyst in New York at DailyFX.com, the research unit of FXCM Inc. (FXCM), an online currency-trading service. “It seems like the Bank of Canada will be on hold for a prolonged period.”
The loonie, nicknamed for the image of the aquatic bird on the C$1 coin, fell 0.6 percent on the week to 99.78 cents against the U.S. dollar yesterday in Toronto. One Canadian dollar purchases $1.0022.
The Standard & Poor’s 500 Index fell 0.5 percent this week, it’s first decline since the five days ended Feb. 10. The MSCI World Index lost 1 percent. Equities are the primary driver of the Canadian dollar’s performance, according to data compiled by Bloomberg.
The correlation coefficient between the loonie and the S&P 500 was 0.75 yesterday, versus 0.51 for oil, 0.61 for copper and 0.46 for the U.S.-Canada two-year yield spread, 30-day correlation data show. A coefficient of 1 means the measures move in lockstep.
Canada Dollar Declines for a 3rd Week as Economic Growth Stalls - Businessweek
Canada’s dollar depreciated for the third straight week, the longest string of losses since August, as a rally in higher-risk assets faded, stoking demand for havens such as the yen, U.S. dollar and Swiss franc.
The currency touched the lowest level this month yesterday, reflecting diminished confidence in the nation’s economy after reports during the week on retail sales and consumer prices trailed median forecasts. Futures trading shows a reduced likelihood of interest-rate increases. Canadian Finance Minister Jim Flaherty will present the government’s budget on March 29.
“The Canadian dollar has been underperforming against its major counterparts,” said David Song, a currency analyst in New York at DailyFX.com, the research unit of FXCM Inc. (FXCM), an online currency-trading service. “It seems like the Bank of Canada will be on hold for a prolonged period.”
The loonie, nicknamed for the image of the aquatic bird on the C$1 coin, fell 0.6 percent on the week to 99.78 cents against the U.S. dollar yesterday in Toronto. One Canadian dollar purchases $1.0022.
The Standard & Poor’s 500 Index fell 0.5 percent this week, it’s first decline since the five days ended Feb. 10. The MSCI World Index lost 1 percent. Equities are the primary driver of the Canadian dollar’s performance, according to data compiled by Bloomberg.
The correlation coefficient between the loonie and the S&P 500 was 0.75 yesterday, versus 0.51 for oil, 0.61 for copper and 0.46 for the U.S.-Canada two-year yield spread, 30-day correlation data show. A coefficient of 1 means the measures move in lockstep.
Canada Dollar Declines for a 3rd Week as Economic Growth Stalls - Businessweek
