The Canadian Press - ONLINE EDITION

Canadian dollar dips, economic growth rebounds strongly from weak first quarter

  • Print

TORONTO - The Canadian dollar closed lower Friday amid data that showed the economy grew more than expected in the second quarter.

The loonie was down 0.22 of a cent at 91.97 cents US as Statistics Canada reported gross domestic product ran up at an annual rate of 3.1 per cent, higher than the 2.7 per cent read that economists had expected.

First-quarter GDP growth, which was affected by a severe winter, was revised down to 0.9 per cent compared with an earlier reading of 1.2 per cent.

On a monthly basis, GDP climbed 0.3 per cent in June versus the 0.2 per cent rise that had been forecast, the highest quarterly gain since the third quarter of 2011.

The American currency gained strength during the morning amid another sign of economic weakness in Europe. Inflation in the 18 countries that use the euro sank to 0.3 per cent in August, down from 0.4 per cent in July and is the lowest since October 2009.

Inflation has been so low for so long that it has raised fears of deflation, a crippling downward price spiral that comes about when people hold off buying things because they think prices will fall further.

In the U.S., consumer spending remained lacklustre in July as auto sales slipped from eight-year highs and retail sales stalled. Spending dropped 0.1 per cent, against the gain of 0.3 per cent that generally had been expected.

Other data showed a sharp uptick in manufacturing activity in the American Midwest. The Chicago Purchasing Managers Index surged to 64.3 in August from 56.5 in July.

Investors also watched the Ukraine conflict for signs of further escalation after the country’s president said that Russian forces had entered the southeastern part of the country, which had largely escaped earlier fighting between Ukraine forces and pro-Russian militias.

European Union foreign ministers met Friday to weigh adopting a tougher stance on the Ukraine crisis amid increasing calls to beef up economic sanctions against Russia.

The Canadian dollar has had a strong week, up about six tenths of a cent with the currency benefiting from a deal that will see American fast food giant Burger King buy Canadian coffee and doughnut chain Tim Hortons for $12.5 billion. The loonie has been pushed higher in the past by such big corporate takeovers as foreign buyers acquiring a Canadian company need Canadian dollars to close the deal, boosting demand for the loonie on financial markets.

On the commodity markets, October crude in New York gained $1.41 to US$95.96 a barrel.

December gold backed off $3 to US$1,287.40 an ounce while December copper gained one cent to US$3.16 a pound.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Willy wants to get back to winning

View more like this

Photo Store Gallery

  • May 22, 2012 - 120522  - Westminster United Church photographed Tuesday May 22, 2012 .  John Woods / Winnipeg Free Press
  • Marc Gallant / Winnipeg Free Press.  Local/Weather Standup- Catching rays. Prairie Dog stretches out at Fort Whyte Centre. Fort Whyte has a Prairie Dog enclosure with aprox. 20 dogs young and old. 060607.

View More Gallery Photos

Poll

Do you think e-cigarettes should be banned by the school division?

View Results

Ads by Google