* The Canadian dollar climbs 0.2 percent against the US dollar.
* The loonie falls to 1.2423, its lowest level since June 21. * Canadian GDP declines 0.3 percent in April. * The price of US oil jumps 0.8 percent.
Reuters, TORONTO, June 30 – The Canadian dollar climbed against the US dollar on Wednesday as oil prices surged and statistics indicated the economy contracted less than predicted in April, but the currency was still on course to register its worst monthly loss since March of last year.
As a result of the COVID-19 outbreak, Canadian GDP decreased 0.3 percent in April, exceeding analyst expectations of a 0.8 percent drop, according to Statistics Canada statistics.
According to a preliminary assessment, the economy shrank by 0.3 percent in May. Some provinces held off on easing restrictions until June.
“The setbacks in April and May were most likely temporary,” said Sri Thanabalasingam, senior economist at TD Economics. “A rapid rebound in economic activity should result from reopening across the country, reducing cases and hospitalizations, and an unprecedented vaccine deployment.”
Oil, one of Canada’s main exports, surged in price when industry data indicated that US crude stockpiles were reducing.
The Canadian currency was trading 0.2 percent higher at 1.2375 to the greenback, or 80.81 US cents, as US oil prices jumped 0.8 percent to $73.58 a barrel. It had previously fallen to 1.2423, its lowest level since June 21.
The loonie was on track to fall 2.5 percent this month as the US dollar benefited from the Federal Reserve’s aggressive shift in outlook. The release of the nonfarm payrolls report in the United States on Friday could provide investors with further information regarding the Fed’s forecast.
The 10-year Canadian government bond yield fell about half a basis point to 1.410 percent, with the 10-year down around half a basis point. The bond market in Canada is set to close early on Thursday, ahead of the Canada Day vacation.
(Fergal Smith contributed reporting, and Andrea Ricci edited the piece.)/n
