(Adds analyst quotes and details throughout; updates prices)
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Canadian dollar falls 0.7% against the greenback
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Touches its weakest since Nov. 4 at 1.3645
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Canada’s third-quarter GDP increases 2.9%
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Canadian bond yields rise across curve
TORONTO, Nov 29 (Reuters) – The Canadian dollar fell to
its lowest level in nearly four weeks against the greenback on
Tuesday, a move that analysts said was likely transaction-driven
and despite data showing that Canada’s economy grew
faster-than-expected in the third quarter.
The loonie was trading 0.7% lower at 1.3589 to the
greenback, or 73.59 U.S. cents, the biggest decline among G10
currencies. It touched its weakest level since Nov. 4 at 1.3645.
“The Canadian dollar was inexplicably weak today,” said Adam
Button, chief currency analyst at ForexLive. “I assume a large
corporate or possibly M&A deal was going through the market.”
The move coincided with HSBC agreeing to sell its
business in Canada to Royal Bank of Canada for C$13.5
billion ($10 billion) in cash.
Canada’s economy grew at an annualized rate of 2.9% in the
third quarter, above analysts’ expectations, driven by exports
and non-residential structures, Statistics Canada data showed.
The details were less bullish, with final domestic demand
falling 0.6%, while a preliminary estimate showed that October’s
GDP was unchanged after the economy grew by 0.1% in September
compared to August.
Money markets continued to expect a 25 basis point interest
rate hike by the Bank of Canada at a policy decision next week,
while seeing a 25% chance of a larger move.
The price of oil, one of Canada’s major exports, rose on
hopes for a relaxation of China’s strict COVID-19 controls. U.S.
crude prices settled 1.2% higher at $78.20 a barrel.
Canadian government bond yields were higher across the
curve, with the 10-year up 5.5 basis points at
2.998%.
(Reporting by Fergal Smith; Editing by Bernadette Baum and
Grant McCool)
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