29.09.202621:17:49UTC+00Canadian Dollar Weakens as GDP Growth Stalls

The Canadian dollar edged down to around 1.42 per US dollar in September, its weakest level in roughly 12 weeks, as subdued domestic growth and a stronger US dollar kept the loonie under pressure. Advance estimates indicated that real GDP grew by 0.2% in August, with gains in mining and quarrying and in retail trade partially offset by a decline in oil and gas extraction. GDP was essentially flat in July, ending a three‑month stretch of expansion. While the July result was broadly in line with expectations, it underscored a softer start to the third quarter. The weaker growth profile has reinforced expectations that the Bank of Canada will keep interest rates on hold. At the same time, the US dollar strengthened against a basket of major currencies as markets increased their bets on additional Federal Reserve rate hikes. Anticipation of a wider interest-rate differential between the US and Canada continues to bolster the greenback’s advantage over the loonie.