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Canadian dollar steadies as data shows slowing economic growth

Credit: REUTERS/MARK BLINCH

The Canadian dollar was little changed against its U.S. counterpart on Thursday as domestic data showed modest economic growth, with the currency steadying after it was pressured the day before by a more dovish tone from the Bank of Canada.

* Canadian dollar trades near flat against the greenback

* Canadian GDP increases 0.1% in August

* Loonie on track to rise 0.6% for the month

* Canadian bond prices rise across the yield curve

By Fergal Smith

TORONTO, Oct 31 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Thursday as domestic data showed modest economic growth, with the currency steadying after it was pressured the day before by a more dovish tone from the Bank of Canada.

At 10:03 a.m. (1403 GMT), the Canadian dollar was trading nearly unchanged at 1.3157 to the greenback, or 76.01 U.S. cents. The currency, which hit a near two-week low on Wednesday at 1.3210, traded in a narrow range of 1.3148 to 1.3178.

For the month, the loonie was on track to rise 0.6%.

Canada's economy gained 0.1% in August, a touch less than analysts expected, amid a rebound in manufacturing and an uptick in services-producing industries, Statistics Canada data showed.

"The big picture is that growth has throttled back to around potential, or slightly lower, after a one-quarter bounce in the spring," Doug Porter, chief economist at BMO Capital Markets, said in a note.

On Wednesday, the Bank of Canada cut domestic and global growth forecasts as it held its benchmark interest rate steady at 1.75% as expected. The central bank left the door open to a possible cut over the coming months that could help the economy weather the damaging effects of global trade conflicts.

Uncertainty around a potential trade deal between the United States and China weighed on Wall Street on Thursday, while the price of oil, one of Canada's major exports, was pressured by rising U.S. crude oil stocks and weak factory activity in China.

U.S. crude oil futures fell 1.1% to $54.44 a barrel.

Meanwhile, the Canadian province of Alberta said it would allow companies to produce additional oil if they move it by rail, easing curtailment rules that were designed to reduce transport bottlenecks.

Pipeline capacity shortages have led many companies to move from Canada's energy sector. Oil and gas producer Encana Corp said on Thursday it will shift its base to the United States.

Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 7 Canadian cents to yield 1.524% and the 10-year was up 35 Canadian cents to yield 1.413%.

The 10-year yield touched its lowest intraday since Oct. 11 at 1.405%. (Reporting by Fergal Smith Editing by Alistair Bell) ((fergal.smith@thomsonreuters.com; +1 416 941 8113;)) Keywords: CANADA FOREX/

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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