Canadian Dollar Falls for Second Day on Lower China Growth View
2012-03-05 12:34:44.51 GMT
By Chris Fournier
March 5 (Bloomberg) -- Canada’s dollar depreciated versus its U.S. counterpart for a second day and fell against a majority of its most-traded counterparts after China lowered its growth forecast, crimping demand for higher-risk assets.
The currency touched the lowest level in almost a week, dropping for the first day in five versus the yen. Canada’s central bank meets on March 8 to determine interest rates, with all 25 economists in a Bloomberg survey predicting no change from 1 percent. Crude oil and stocks fell.
“We were a bit risk averse going into the weekend; the China slowdown has added to that,” said Kit Juckes, head of foreign-exchange research at Societe Generale SA in London.
“The Canadian dollar will perform much in line with risk hesitation. I’m optimistic medium term but I think all of these moves have run out of steam a little bit,” he said, referring to recent gains in commodity-linked currencies.
Canada’s currency, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, fell 0.5 percent to 99.42 cents per U.S. dollar at 7:33 a.m. in Toronto. It traded at
99.60 cents, the weakest since Feb. 28. One Canadian dollar purchases $1.0058.
The currency capped its strongest weekly gain since January on March 2 on speculation officials are containing Europe’s debt crisis and as U.S. economic indicators improve, bolstering optimism that quickening global growth will raise demand for Canada’s exports such as crude oil and copper.
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