The Canadian dollar CADUSD 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.
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 expectations.
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%.
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