CAD Drops After Positive US Data is Released

The Canadian dollar was lower Friday as investors looked to China to see if it will make any moves to address its economic slowdown.

The loonie fell 0.09 of a cent to 90.56 cents US.

Markets have been antsy, awaiting an indication of whether the world’s second-largest economy will pump more stimulus into its economy, as growth in China has slowed to its weakest point since the financial crisis.

China has set a target of 7.5 per cent economic growth this year but is more concerned with creating new jobs than precisely meeting the GDP figure.

A preliminary reading of China’s manufacturing, released Monday, showed activity at an eight-month low in March.

Meanwhile, there was more evidence to show that the U.S. economy is gaining strength at a moderate pace.

Americans spent slightly more in February but the increase, although modest, may have held back by severe winter weather.

The Commerce Department says consumer spending rose 0.3 per cent in February following a 0.2 per cent rise in January. The spending increases would have been weaker except for a surge in spending on utility bills.

In February, spending on durable goods such as autos dropped as consumers stayed away from auto dealerships.

Income increased 0.3 per cent in February, the same amount as January.

via Globe & Mail

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza