Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

CANADA FX DEBT-C$ edges higher vs U.S. dollar after Canada's GDP surges in June

Published 2020-08-28, 03:08 p/m
© Reuters.
USD/CAD
-
CA2YT=RR
-
CA10YT=RR
-

* Canadian dollar at 1.3094 to the greenback

* Bond prices higher across the maturity curve (Adds analyst's comment, updates prices)

By Saqib Iqbal Ahmed

Aug 28 (Reuters) - The Canadian dollar climbed to a fresh seven-month high against its U.S. counterpart on Friday, on pace for a fourth straight day of gains as the U.S. dollar remained broadly weak and after data showed a record surge in Canada's real gross domestic product in June.

The Canadian dollar CAD= was at 1.3094 to the greenback, or 76.37 U.S. cents, stronger than Thursday's close of 1.3123, or 76.20 U.S. cents.

Canada's real GDP surged by a record 6.5% in June, as the economy continued to claw back from steep declines in March and April, though economic activity still remained below pre-pandemic levels, Statistics Canada said on Friday. quarter annualized growth meanwhile sank by a record 38.7%, Statistics Canada said in a preliminary estimate.

The June numbers were above analyst expectations of a rise of 5.6%, while the second quarter plunge was slightly less sharp than an expected decline of 39.6%.

"The second-quarter GDP data confirm that the lockdown caused an unprecedented record contraction of 38.7% annualized, but the larger-than-expected rise in GDP in June at least provides a strong handover to the third quarter and means that there will now be a record expansion," Stephen Brown, senior Canada economist at Capital Economics, said in a note.

The loonie is on track to finish the week up 0.6%, its fourth straight weekly gain. The price of oil, one of Canada's main exports, was nearly flat on the day but was on pace to end the week about 1.6% higher.

"With global risk sentiment improving and stability in oil prices, the Canadian dollar has performed well this week," said Joe Manimbo, senior market analyst at Western Union Business Solutions.

Canadian government bond prices were higher across the maturity curve. The two-year CA2YT=RR yield was at 0.281%, down from 0.297% late on Thursday, while the benchmark Canadian 10-year CA10YT=RR yield fell to 0.638% from 0.668%.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.