The Canadian dollar weakened beyond C$1.10 per U.S. dollar for the first time in four months as speculation built the U.S. Federal Reserve would raise interest rates faster than the Bank of Canada.
The currency traded little changed as a report showed Canadian housing starts fell the first time in five months, suggesting that market may be moderating as an economic driver. The country reported last week it lost 11,000 jobs in August two days after a Bank of Canada interest-rate decision where it refrained from raising borrowing costs and said it was still waiting for rising exports to take over from over-indebted consumers as the main driver of economic growth.
“There’s not enough growth in the world to support what we’re selling,” said Darcy Browne, managing director of currencies at Canadian Imperial Bank of Commerce, by phone from Toronto. “The market is looking at us thinking we’re not hiking rates. And if we do, it’s definitely later than when the U.S. is going to do it.”
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