CAD Rises After US Weak Consumer Spending

The Canadian dollar was slightly higher Thursday amid mixed commodity prices and a tepid read on American consumer spending.

The loonie was up 0.06 of a cent to 93.33 cents US.

The U.S. Commerce Department says consumer spending rose 0.2 per cent last month after no gain in April, missing expectations for a 0.4 per cent rise.

The data was an unpleasant surprise as consumer spending accounts for 70 per cent of the American economy.

And the numbers came out a day after another report showed that the American economy contracted in the first quarter by 2.9 per cent, larger than the two per cent contraction economists had expected. The numbers were largely shrugged off as the performance was tied to severe winter weather.

But BMO Capital Markets says while it sees an improvement for the second quarter, it’s now looking at annualized growth of around three per cent, down sharply from earlier estimates of 3.8 per cent growth.

via Globe and Mail

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