TORONTO: The Canadian dollar strengthened to a four-week high against its US counterpart on Friday after stronger-than-expected quarterly GDP data prompted investors to reduce the amount of additional easing they expected from the Bank of Canada in the current rate cutting campaign.
The loonie was trading 0.4 percent higher at 1.3980 per US dollar, or 71.53 US cents, after touching its strongest intraday level since October 30 at 1.3939. For the week, the currency was up 0.9 percent, putting it on track for its biggest weekly advance since May, while it was headed for a November gain of 0.2 percent.
The US dollar has weakened against a basket of major currencies in recent days as investors bet on a December rate cut by the Federal Reserve.
Canada’s economy grew at an annualized pace of 2.6 percent in the third quarter as crude oil exports and government spending boosted economic activity even as business investments and household consumption disappointed. Economists had forecast growth of 0.5 percent.
Investors priced in an end-point for BoC easing of 2.15 percent in July next year, up from 2.14 percent before the data. Last month, the central bank cut its benchmark interest rate to a three-year low of 2.25 percent.