Canadian dollar slips as weak earnings weigh on sentiment

Fri Oct 26, 2012 9:59am EDT
 
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By Alastair Sharp

TORONTO (Reuters) - The Canadian dollar edged lower against the U.S. currency on Friday as weak corporate earnings weighed on the market and traders largely brushed off a solid reading of economic growth in the United States, Canada's largest trading partner.

The currency was hurt as disappointing results from technology giant Apple Inc (AAPL.O: Quote) and a net loss from Internet retailer Amazon.com Inc dampened market sentiment.

Data showed growth U.S. gross domestic product picked up to an annualized 2 percent in the third quarter as a late burst in consumer spending offset the first cutbacks in investment in more than a year by cautious businesses.

"A better print (on U.S. GDP) seemed to be expected...but moreover people are just expecting earnings season to continue to be poor, and that's going to weigh," said John Curran, senior vice president at CanadianForex.

At 9:25 a.m. the Canadian dollar was at C$0.9945 to the greenback, or $1.0055, compared with C$0.9939, or $1.0061, at Thursday's North American close. It's on track to weaken by 0.3 percent on the week, after a sharp depreciation the week before.

Data showing Spanish unemployment hit a record 25 percent in the third quarter added to gloom about global growth, which can have a pronounced effect on the commodity-linked currency.

A poor showing from U.S. GDP data could have pushed the Canadian dollar through parity for the first time since August, though several moving averages and other technical resistance levels make that more difficult.

"Ultimately, there's a fair bit of congestion in terms of technical levels to get through," said Jack Spitz, managing director of foreign exchange at National Bank Financial.   Continued...