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Canadian dollar hits 1-week low as domestic economy stalls

Published 2019-10-01, 09:29 a/m
© Reuters.  Canadian dollar hits 1-week low as domestic economy stalls
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* Canadian dollar weakens 0.3% against greenback

* Canada's GDP unchanged in July

* Loonie touches lowest level since Sept. 23 at 1.3290

* Canadian bond prices decline across steeper yield curve

TORONTO, Oct 1 (Reuters) - The Canadian dollar weakened to a one-week low against its U.S. counterpart on Tuesday as the greenback broadly climbed and after data showed that the domestic economy unexpectedly failed to grow in July.

Canada's economy was unchanged in July, following four straight months of growth, as the country's mining, quarrying and oil and gas extraction sectors contracted, Statistics Canada data showed. Analysts had forecast an increase of 0.1%. the U.S. dollar .DXY climbed to a 29-month high as a blizzard of soft global data left the U.S. economy as the only one still looking reasonably healthy. 9:01 a.m. (1301 GMT), the Canadian dollar CAD=D4 was trading 0.3% lower at 1.3282 to the greenback, or 75.29 U.S. cents. The Canadian currency, which gained 0.5% in September, hit its weakest intraday level since Sept. 23 at 1.3290.

The decline for the loonie came as another commodity-linked currency, the Australian dollar, was pressured by a Reserve Bank of Australia interest rate cut.

The Bank of Canada has left interest rates on hold this year despite easing by some of its global peers, including the U.S. Federal Reserve. Still, Canada's central bank has worried that the U.S.-China trade conflict is weighing more heavily on the global economy. price of oil, one of Canada's major exports, rebounded on reports that output from the world's largest oil producers fell during the third quarter, although a resumption in Saudi supply and demand concerns kept a lid on gains. U.S. crude oil futures CLc1 were up 1.1% at $54.65 a barrel. government bond prices were lower across a steeper yield curve. The two-year CA2YT=RR fell 5 Canadian cents to yield 1.608% and the 10-year CA10YT=RR was down 68 Canadian cents to yield 1.434%, its highest yield since Sept. 20.

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