Canadian Dollar Recovers After GDP Data
September 01 2015 - 5:11AM
RTTF2
The Canadian dollar edged up against its major rivals in
European deals on Tuesday, trimming early losses, after data showed
that the economy grew at a faster pace in June, following a decline
in five consecutive months.
Data from Statistics Canada showed that real gross domestic
product rose 0.5 percent in June. The increase in June was broad
based, led by mining, quarrying, and oil and gas extraction and, to
a lesser extent, wholesale trade, the finance and insurance sector
as well as arts and entertainment.
This was up from forecasts for an increase of 0.2 percent,
following a 0.2 percent decline in May.
Meanwhile, the decline in oil prices kept the currency's gains
in check.
Crude for October delivery declined $1.99 to $47.21 a
barrel.
The oil prices fell sharply, as weak Chinese manufacturing data
for August reinforced concerns over the world's second-largest
economy.
An official gauge of Chinese manufacturing activity slumped to a
three-year low in August and Caixin's final August PMI number
indicated that activity in China's vast factory sector shrank at
its fastest pace in almost six-and-a-half years in the month,
raising fears of a hard landing for the world's second largest
economy.
The American Petroleum Institute will release weekly crude oil
inventories report later in the day, while the Energy Information
Administration will publish official crude inventories data
tomorrow.
The loonie showed mixed performance in the previous session.
While the loonie held steady against the greenback and the aussie,
it fell against the yen and the euro.
The loonie bounced off to 91.37 against the yen, from its
previous 5-day low of 90.39. The loonie is likely to challenge
resistance around the 93.5 mark.
The loonie climbed to 0.9257 against the aussie, a level not
seen since August 2013. On the upside, the loonie may possibly find
resistance around the 0.90 level. At yesterday's close, the pair
was valued at 0.9343.
The loonie recovered to 1.3117 against the greenback and 1.4754
against the euro, off its early lows of 1.3232 and 1.4962,
respectively. If the loonie extends rise, it is likely to challenge
resistance around 1.30 against the greenback and 1.46 against the
euro.
Looking ahead, Markit's final U.S. manufacturing PMI for August,
the Institute for Supply Management's manufacturing PMI for August
and construction spending data for July are slated for release
shortly.
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