CANADA FX-C$ falls to 3-wk low as GDP data disappoints

Wed Jun 30, 2010 11:00am EDT
 
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 TORONTO, June 30 (Reuters) - The Canadian dollar hit its
lowest level in three weeks against the U.S. dollar on
Wednesday as expectations for higher interest rates were pared
back further after data showed the Canadian economy stalled
unexpectedly in April.
 The Canadian dollar CAD=D4 touched C$1.0612 to the U.S.
dollar, or 94.23 U.S. cents, at midmorning, its lowest since
June 7.
 Currencies usually strengthen as interest rates rise as
higher rates attract capital flows. Expectations for a Bank of
Canada rate rise, as measured by yields on overnight index
swaps,dropped below 50 percent on Wednesday from around 80
percent just last week.
 Government data showed real gross domestic product in
Canada was flat in April after seven straight months of
expansion, disappointing market expectations for 0.2 percent
growth. [ID:nN30434455]
 (Reporting by Ka Yan Ng; editing by Peter Galloway)