The Canadian dollar declined to the weakest level since June versus its U.S. counterpart as concern economic growth is slowing increased and investors sought a refuge from a renewal of global financial market turmoil.
The currency fluctuated as oil, the nation’s largest export, fell to a seven-week low. Federal Reserve Chairman Ben S. Bernanke said spending cuts set to take effect in three days would harm the economy of Canada’s largest trading partner. A slowdown could prompt the Bank of Canada to drop warnings of impending interest rate increases later this year, according to a person familiar with a Medley Global Advisors report, who declined to be identified.
“Bernanke’s focus on the increasing burden the economy will bear from the fiscal side is negative for U.S. growth and therefore negative for Canada,” said Camilla Sutton, head of currency strategy at Bank of Nova Scotia, by phone from Toronto.
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