Canada Dollar Moves Back to Parity After Economy Shrinks

Canada’s dollar reached almost a 12- week low against its U.S. counterpart after the nation’s gross domestic product unexpectedly shrank for the first time in six months, spurring bets interest rates won’t be raised soon.

The currency traded below parity with the U.S. dollar for a third day after Statistics Canada said output fell 0.1 percent to an annualized C$1.29 trillion ($1.29 trillion) in August from July, compared with a 0.2 percent increase forecast in a Bloomberg survey. A report on Nov. 2 is forecast to show hiring slowed this month. The currency pared losses as crude oil, Canada’s biggest export, increased and Canadian stocks rose.

“The weaker-than-expected GDP print has the market questioning the Bank of Canada’s hawkish bias,” said Joe Manimbo, a market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co. “Any slowing in hiring in Canada is liable to push the loonie further below parity against the greenback.”

via Bloomberg

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