Canadian dollar hits a one-month low

The Canadian dollar hit a more than one-month low against the greenback on Friday, capping an otherwise staid week with a sharp drop as it got caught in a wide US dollar rally. The Canadian dollar was modestly weaker in morning trading following better-than-expected US durable goods data, which benefited the greenback.
But loonie selling picked up through the session as the currency broke through key technical areas, piercing the C$1.08 level and dropping out of its recent trading range. A lacklustre performance by other commodity-sensitive currencies against the greenback also pressured the loonie, analysts said.
"It's definitely caught a lot of people by surprise, especially because over the last several weeks we've been very range-bound, not really reacting too heavily to a lot of news," said Rahim Madhavji, president of KnightsbridgeFX.com in Toronto. Analysts said some of the move in favour of the US dollar was due to investor positioning ahead of some key US economic data next week that is expected to come in strong, including second-quarter gross domestic product and July's unemployment report.
The Canadian dollar ended the North American session at C$1.0814 to the greenback, or 92.47 US cents, weaker than Thursday's close of C$1.0745, or 93.07 US cents. The currency's session low was C$1.0822, its lowest level since mid June. For the week, the Canadian dollar lost 0.8 percent. The loonie had rallied 1.6 percent through June but it pulled back after a disappointing Canadian jobs report in early July and has since traded largely sideways.
"The Canadian dollar has been on the defensive a little more over the past couple of weeks, following the rebound we had two weeks ago from the C$1.06 area after the poor Canadian employment numbers," said Shaun Osborne, chief currency strategist at TD Securities in Toronto. "And I think what we're seeing today is just a continuation of that move."
Osborne said the loonie is likely to fall further. He expects to see it at C$1.09 over the next week or two, pushing toward C$1.10 and C$1.12 in the next few months. Canadian government bond yields tumbled, with the yield on the benchmark 10-year falling to a more than one-year low at 2.112 percent. The two-year price was up 3 Canadian cents to yield 1.083 percent.