(Bloomberg) -- Canada’s dollar slumped Tuesday - at one stage falling by the most in more than a month -- even as major peers like the Australian and New Zealand dollars gained ground against the greenback. Most Read from BloombergScientists Revive 48,500-Year-Old ‘Zombie Virus’ Buried in IceBanks Stuck With $42 Billion Debt Seize Chance to Offload ItThese Are the Best and Worst Cities for Expats to Live and Work InThis Is Where Luxury Property Prices May Rise and Fall the Most in 2023Apple to L
The Canadian dollar weakened to its lowest level in nearly three weeks against its U.S. counterpart on Tuesday as data showed faster-than-expected GDP growth in the third quarter but a decline in domestic demand. Canada's economy grew at an annualized rate of 2.9% in the third quarter, above analysts' expectations, driven by exports and non-residential structures, Statistics Canada data showed. Final domestic demand fell 0.6%, while a preliminary estimate showed that October's GDP was unchanged after the economy grew by 0.1% in September compared to August.
The Canadian dollar weakened against its U.S. counterpart on Friday, with the currency adding to this week's decline as oil prices fell and data showed the largest divestment of Canadian securities by foreign investors in nearly four years. The loonie was trading 0.5% lower at 1.3390 to the greenback, or 74.68 U.S. cents, after touching its weakest level since Nov. 10 at 1.3409. "I think fundamentals are reasserting themselves," said Eric Theoret, global macro strategist at Manulife Investment Management.
"The plunge that we have seen in the crypto space over the last two days caught up with risk sentiment today, resulting in weak stock and commodity prices," said George Davis, chief technical strategist at RBC Capital Markets. The U.S. dollar climbed against a basket of major currencies and U.S. stock indexes fell as the outcomes of tightly contested U.S. midterm elections remained unclear. Its governor, Tiff Macklem, is due on Thursday to give a speech on the evolution of the Canadian labour market.
The Canadian dollar strengthened by the most in 12 years against its U.S. counterpart on Friday as oil prices jumped and domestic jobs data bolstered bets for another larger than normal interest rate hike by the Bank of Canada next month. The United States also added more jobs than anticipated last month but the U.S. dollar did not benefit. It tumbled against a basket of major currencies while the price of oil, one of Canada's major exports, surged, as reports China may relax its strict anti-COVID measures boosted investor sentiment.
The Canadian dollar weakened to a near two-week low against its U.S. counterpart on Thursday before clawing back some of its losses, as oil prices fell and investors turned attention to the release of U.S. and Canadian employment data on Friday. The price of oil, one of Canada's major exports, settled 2% lower at $88.17 a barrel as China stood by its zero-COVID policy and an increase in U.S. interest rates pushed up the U.S. dollar, raising fears of a global recession that would crimp fuel demand. Canadian employment data for October, due on Friday, could provide further clues on the strength of the domestic economy.
Canada's dollar will gain less than previously thought over the coming year as the domestic economy has lost some sensitivity to oil prices and the Bank of Canada potentially lagging the Federal Reserve in hiking rates, a Reuters poll showed. The currency has weakened over 7% against the U.S. dollar since the start of 2022. According to the median forecast of nearly 30 currency analysts in the Oct. 28-Nov. 1 poll the Canadian dollar will weaken over 0.5% to 1.37 per U.S. dollar, or 72.99 U.S. cents, in three months' time, compared with the October forecast of 1.34.
U.S. stocks reversed course and turned sharply lower as Fed Chair Jerome Powell said it was "very premature" to be thinking about pausing rate hikes, with the comments offsetting a signal in the central bank's policy statement that smaller rate hikes may be on the horizon. The Canadian dollar will gain less than previously thought over the coming year as the domestic economy has lost some sensitivity to oil prices and with the BoC potentially lagging the Fed in hiking interest rates, a Reuters poll showed.
The Canadian dollar weakened against its U.S. counterpart on Friday, giving back some of its weekly advance, as attention turned to a Federal Reserve interest rate decision next week, while data showed surprise growth in the domestic economy. The loonie was down 0.3% at 1.3610 to the greenback, or 73.48 U.S. cents, pulling back from its strongest intraday level in nearly five weeks on Thursday at 1.3493. "I think USD-CAD bears are a little disappointed that it couldn't crack the October lows around 1.35," said Amo Sahota, director at Klarity FX in San Francisco.
The Canadian dollar edged lower against its U.S. counterpart on Thursday but held on to much of its recent gains as oil prices rose and despite broader strength for the greenback. The euro briefly fell back below parity with the U.S. dollar after the European Central Bank raised interest rates in line with expectations and data showed that the U.S. economy rebounded more than expected in the third quarter. Among G10 currencies, only the New Zealand dollar and the yen fared better than Canada's commodity-linked currency.