FX.co ★ Canadian Dollar Nears 12-Week Low

The Canadian dollar edged down to around 1.42 per US dollar in September, its weakest level in roughly 12 weeks, as subdued domestic growth and a stronger greenback kept the loonie under pressure. Advance estimates showed real GDP rising 0.2% in August, with gains in mining and quarrying and in retail trade partly offset by a decline in oil and gas extraction. GDP was essentially flat in July, ending a three-month streak of expansion and pointing to a softer start to the third quarter. The data, broadly in line with expectations, reinforced the view that the Bank of Canada is likely to keep interest rates on hold. At the same time, a US ban on imports of various Canadian goods came into effect. Meanwhile, the US dollar advanced against a basket of major currencies as markets increased bets on further rate hikes by the Federal Reserve. Expectations of a widening interest-rate differential between the US and Canada are further bolstering the greenback’s advantage over the loonie.