Loonie Slips Despite Robust Economic Growth

The Canadian dollar ended its up-and-down week on a sour note, sliding back despite robust economic growth. The loonie finished at US$0.7200 or US$1=C$1.3888 on Friday, down from US$0.7214 the previous day.

Statistics Canada reported that Canada's economy grew at an annualized rate of 3.3 per cent in the second quarter, a significant improvement from the 0.3 per cent growth in the first quarter.

The decline in the Canadian dollar coincided with a slight drop in crude oil prices, as West Texas Intermediate fell US$0.08 per barrel to US$83.45 and Brent crude oil dropped US$0.39/barrel to US$89.31.

Meanwhile, Federal Reserve Chairman Kevin Warsh expressed concerns over inflation, suggesting that the central bank may need to raise interest rates sooner than expected.