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Canada Dollar Falls Most in a Week Since January as Stocks Drop By Chris Fournier
April 30 (Bloomberg) -- Canada’s dollar registered its biggest weekly drop since January as a fall in stocks overshadowed a report that showed the nation’s economy grew and signs that Greece may reach an agreement on a rescue package.
The currency, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, fell for the first time in three days. It weakened from the one-for-one level that it reached on April 6 with its U.S. counterpart for the first time since July 2008. Equities slid as criminal investigators scrutinized Goldman Sachs Group Inc.
“The Canadian dollar has fallen out of favor in today’s trading,’’ said Tyson Wright, a Victoria, British Columbia-based senior currency trader at Custom House, which handles foreign- exchange transactions. “People are taking some profit and re- evaluating. It’s a consolidation pattern just above par.â€
Canada’s currency depreciated 1.1 percent to C$1.0162 per U.S. dollar at 4:09 p.m. in Toronto, from C$1.0052 yesterday. It tumbled 1.7 percent for the week, the most since the five days ended Jan. 22. One Canadian dollar buys 98.41 U.S. cents. Government bonds climbed.
The loonie gained last week as the Bank of Canada signaled that interest rates will rise, possibly as soon as June 1. The bank held the benchmark rate at a record low 0.25 percent while dropping a conditional commitment to keep it there through June.
Mark Carney, the central bank governor, modified his language this week, spurring speculation that markets may be pricing in too much chance of an increase at the June 1 rate meeting. Carney said in testimony at Parliament that “going forward, nothing is pre-ordained.â€
Sixth GDP Increase
Gross domestic product increased 0.3 percent in February, the sixth straight rise, Statistics Canada data showed today in Ottawa. The result matched the median of 21 estimates by economists surveyed by Bloomberg News.
Canada’s government bonds advanced, pushing the yield on the benchmark 10-year note down eight basis points, or 0.08 percentage point, to 3.65 percent. The price of the 3.5 percent security due in June 2020 increased 65 cents to C$98.77.
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