Canada's Loonie Takes Hit from Stronger US Dollar
The Canadian dollar weakened on Friday, heading for its steepest weekly decline in more than two months. The loonie traded around C$1.3180, down about 0.3% or roughly $0.04.
This decline came despite data showing Canada's economy grew at a 3.3% annualized pace in the second quarter, sharply rebounding from the first quarter and marking its strongest quarterly expansion since 2023. The result was also above the Bank of Canada's previous forecast of 2.5%.
The stronger economic data provided little support for the loonie because the second-quarter figures largely predated the latest escalation in Canada-U.S. trade tensions. Markets are increasingly focused on how new U.S. tariffs and Canada's retaliatory measures could affect growth in the second half of the year.