XM does not provide services to residents of the United States of America.

Canadian dollar posts biggest monthly decline in two years



<html xmlns="http://www.w3.org/1999/xhtml"><head><title>CANADA FX DEBT-Canadian dollar posts biggest monthly decline in two years</title></head><body>

Loonie touches a 12-week low at 1.3945

Currency weakens 2.8% in October

August GDP was flat

Bond yields ease across the curve

By Fergal Smith

TORONTO, Oct 31 (Reuters) -The Canadian dollar steadied near a 12-week low against its U.S. counterpart on Thursday and posted its biggest monthly decline in more than two years, as the domestic economy stalled in August and investors globally grew risk averse.

The loonie CAD= was trading nearly unchanged at 1.3909 to the U.S. dollar, or 71.90 U.S. cents, after touching its weakest intraday level since Aug. 5 at 1.3945.

For the month of October, the currency was down 2.8%, its biggest monthly decline since September 2022.

"The Canadian dollar was looking like it might carve out another bottom this morning ... but Day Two of the gilt market panic following the latest UK budget then took hold, freaking out the stock market and risk-sensitive currencies like CAD," Erik Bregar, director, FX & precious metals risk management at Silver Gold Bull.

British government bond prices tumbled for a second straight day on Thursday as investors judged finance minister Rachel Reeves' first budget would boost inflation and cause the Bank of England to cut interest rates more slowly.

U.S. stocks slumped after Microsoft and Meta Platforms highlighted growing artificial intelligence costs that could affect their earnings, curbing enthusiasm for megacap stocks that have fueled the market rally this year.

Canada is a major producer of commodities such as oil so the loonie tends to be sensitive to shifts in risk appetite.

The Canadian economy is likely to miss the Bank of Canada's revised third-quarter forecast of annualized 1.5% growth after a slew of temporary factors led to a flat reading for gross domestic product in August.

Economic growth for July was revised downwards to 0.1% from 0.2%, while preliminary data showed growth rebounding to 0.3% in September.

Canadian government bond yields moved lower across the curve, with the 10-year CA10YT=RR down 3.4 basis points at 3.230%.



Reporting by Fergal Smith; Editing by Richard Chang

</body></html>

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.