The Canadian dollar declined the most in more than a week after a report showed economic growth slumped in the first quarter as a harsh winter in North America slowed housing construction, business spending and exports.
The currency trimmed a fourth monthly advance against its U.S. peer as gross domestic product grew at a 1.2 percent annualized pace in January through March, compared with a downwardly revised 2.7 percent in the prior three months, Statistics Canada said in Ottawa. Economists surveyed by Bloomberg predicted growth would slow to a 1.8 percent pace. The U.S. economy contracted at a 1 percent annualized rate in the first quarter, the Commerce Department reported yesterday.
“The GDP just disappointed in Canada,” Darcy Browne, managing director of currencies at Canadian Imperial Bank of Commerce’s capital markets unit, said by phone from Toronto. “There could be another camp that looks at this and says, the U.S. printed minus 1 percent and we printed significantly better than that, so maybe this isn’t a sell-Canada environment. But markets are traditionally built around expectations, and expectation wasn’t met on this number.”