The Canadian dollar sank to a five-week low before reports next week that are forecast to show the nation’s economy is lagging behind that of the U.S., its biggest trading partner.
The currency fell for a second day against its U.S. counterpart, dropping versus all of 16 major peers. The Bank of Canada cut its growth forecast on July 16 and said the nation’s economy won’t reach full potential until mid-2016. Data due next week are projected to show U.S. employment and gross domestic product climbed. Hedge-fund managers and other large speculators stayed bullish on Canada’s dollar.
“The economic numbers are likely to continue to be a drag on the Canadian dollar,” David Doyle, a strategist at Macquarie Capital Markets in Toronto, said in a phone interview. “We’re seeing quite a bit of momentum in the U.S. labor market.
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