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 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 per cent 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.
Second quarter annualized growth meanwhile sank by a record 38.7 per cent, Statistics Canada said in a preliminary estimate.
The June numbers were above analyst expectations of a rise of 5.6 per cent, while the second quarter plunge was slightly less sharp than an expected decline of 39.6 per cent.
“The second-quarter GDP data confirm that the lockdown caused an unprecedented record contraction of 38.7 per cent 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 per cent, 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 per cent 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 yield was at 0.281 per cent, down from 0.297 per cent late on Thursday, while the benchmark Canadian 10-year yield fell to 0.638 per cent from 0.668 per cent.
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