Canada’s dollar traded within one cent of the lowest in almost seven weeks versus its U.S. peer amid speculation on when the Federal Reserve will slow the pace of monetary stimulus in the nation’s biggest trading partner.
The currency pared losses after American durable-goods orders fell more than forecast, calling into question whether U.S. growth is strong enough for stimulus cuts. A wave of cash has flowed into reserve assets including the dollar and euro as investors pulled money from emerging-market economies boosted by Fed bond buying. Canadian gross domestic product shrank in June, a Bloomberg survey forecast before data due Aug. 30.
“We’re still seeing some outflows from the emerging-market world and those outflows end up in places like the U.S. dollar, sterling, euro and yen, and not so much in Canada,” Camilla Sutton, head of currency strategy at Bank of Nova Scotia (BNS) in Toronto, said in a phone interview. “Canada is a little bit weaker than it was, but overall has been weakening far more than the other majors.”
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