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C$ weakens but on track for weekly gain as economy expands

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TORONTO — The Canadian dollar weakened

against its U.S. counterpart on Friday but was on track for a

second straight weekly gain, as preliminary data showed the

domestic economy growing at a pace exceeding the Bank of

Canada’s projection.

The Canadian economy grew at an annualized rate of 4.6% in

the second quarter over the first quarter, Statistics Canada

said in a flash estimate, adding that the economy was

essentially unchanged in May compared to April and that it

likely expanded 0.1% in June.

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Canada’s central bank, which has been hiking interest rates

aggressively to tame high inflation, has projected 4% growth for

the second quarter.

The Canadian dollar was trading 0.4% lower at 1.2850

to the greenback, or 77.82 U.S. cents, after touching its

strongest intraday level since June 13 at 1.2790.

For the week, the currency was on track to advance 0.5%,

while it has edged 0.2% higher since the start of the month, as

the possibility that the Federal Reserve will raise interest

rates more slowly than previously anticipated boosted global

equity markets.

Stocks on Friday added to recent gains and the price of oil,

one of Canada’s major exports, rose as attention turned to next

week’s OPEC+ meeting and expectations that the oil producers

group will dash U.S. hopes for a supply boost.

U.S. crude prices were up 2.9% at $99.19 a barrel.

Canadian government bond yields clawed back some of their

recent decline, tracking the move in U.S. Treasuries and German

Bunds after second-quarter GDP data from the euro zone beat


The Canadian 10-year yield rose 4.9 basis points

to 2.669%, after earlier touching its lowest intraday level

since April 14 at 2.603%.

(Reporting by Fergal Smith; Editing by Paul Simao)

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