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Canadian Dollar Extends Decline As Economy Shrinks For Fifth Month

09:18, 31st July 2015

(RTTNews) - The Canadian continued its downward trading on Friday, as the economy contracted for the fifth consecutive month in May, driven by weakness in manufacturing, mining, quarrying, and oil and gas extraction as well as wholesale trade.

Data from Statistics Canada showed that real gross domestic product fell 0.2 percent in May, while economists were expecting it to be flat. The GDP declined by 0.1 percent in April.

The currency was trading in a negative territory in the previous session, as oil prices collapsed after OPEC Secretary-General Abdullah El-Badri said the oil producers' cartel is not planning production cuts despite the fall in crude prices over recent months and the prospects of greater supply of oil into the market.

Crude for September delivery was down 79 cents at $47.73 a barrel.

Continuing early decline, the loonie slipped by 0.6 percent to hit a weekly low of 0.9531 versus the aussie, compared to Thursday's closing value of 0.9470. The loonie is seen finding support around the 0.96 area.

The loonie depreciated to 1.3090 against the greenback, its weakest since July 24, when it hit near a 12-year low. Continuation of the loonie's bearish trend may help to find a support around the 1.32 mark. At yesterday's close, the pair was quoted at 1.2487.

The loonie fell to 3-day lows of 94.69 against the Japanese yen and 1.4425 against the euro, down from yesterday's closing quotes of 95.44 and 1.4200, respectively. The next possible support levels for the loonie may be located around 94.00 against the yen and 1.46 against the euro.

Looking ahead, University of Michigan's final U.S. consumer sentiment index for July is due shortly.

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