Canada’s dollar traded close to a six-month low versus its U.S. counterpart as data showed the economy of the nation’s largest trading partner unexpectedly shrank in the fourth quarter.
The Canadian pared losses after the U.S. Federal Reserve said it will keep buying bonds as the economy paused because of temporary forces including bad weather. Canada’s gross domestic product figures tomorrow are forecast to show growth increased to 0.2 percent in November from 0.1 percent the month before, according to the median estimate of a Bloomberg survey of 24 economists.
“When the data came out, the headline looked dismal,” said Emanuella Enenajor, an economist at CIBC World Markets by phone from Toronto. “But some key sectors anticipated to lead the U.S. recovery were quite strong, so that’s where you saw the Canadian dollar gain ground in the post knee-jerk reaction.”
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.