Canadian dollar is higher today, but more weakness could be on the way. For now, the loonie is gaining against its major counterparts as it appears that the economy is still in expansion mode, albeit at a slightly slower pace.
Statistics Canada reports that the economy expanded 0.3 per cent in August. This is down from the 0.6 per cent expansion seen in July. However, many aren’t too disappointed in the news, since the July number represents a recovery from flooding in Alberta and an end to a strike in Quebec. Plus, the continued expansion comes two months after June’s 0.5 per cent decline.
The news has given the loonie a boost in the midst of general weakness. And, even though the Canadian dollar is doing well right now, there is the expectation that the currency could lose ground in the future. There are still concerns about Canada’s economy, and a lot of the loonie’s performance is also tied to what happens with the United States, and how commodities end up performing.
With uncertainty in the future, there is a chance that the Canadian dollar’s overall strength could erode further.
At 13:40 GMT USD/CAD is down to 1.0424 from the open at 1.0480. EUR/CAD is down to 1.4231 from the open a 1.4394. GBP/CAD is down to 1.6748 from the open at 1.6808.
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