USD/CAD at Seven Week High at 1.0920

Canada’s dollar touched the weakest level in almost two months as data showing the economy expanded in May failed to damp concern growth is lagging behind that of the U.S., its largest trading partner.

The currency later erased losses amid bets it had dropped too far, too fast. It fell for the first month since January even as the government said Canadian gross domestic product rose 2.3 percent from a year earlier, matching a Bloomberg forecast. The American economy climbed 4 percent at an annual rate in the second quarter, data showed yesterday. Initial U.S. jobless claims fell to an eight-year low in the past month, a report showed today, before July employment data due tomorrow.

“Initial jobless claims in the U.S. is signaling a relatively good reading for tomorrow’s nonfarm payrolls,” Martin Schwerdtfeger, a currency strategist at Toronto-Dominion Bank’s TD Securities unit in Toronto, said in a phone interview. “The Canadian GDP print came on consensus.”

Bloomberg

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