Canadian Dollar Falls On Disappointing GDP Data

The Canadian dollar dropped against its major counterparts in the European session on Friday, as the Canadian economy grew at a much slower pace than forecast in the fourth quarter of 2018.

Data from Statistics Canada showed that the economy grew at an annualised pace of 0.4 percent in the fourth quarter, after rising 2.0 percent in the previous quarter. Economists had forecast a 1.2 percent growth.

On a month-on-month basis, the GDP dropped 0.1 percent, the same rate as in November. Economists had expected the growth to be stagnant.

The currency was further weighed by falling oil prices, led by surging U.S. supply and worries over a global economic slowdown.

Crude for April delivery fell $0.15 to $57.07 per barrel.

China manufacturing sector contracted for the third straight month in February, survey data from IHS Markit showed.

The Caixin China Manufacturing Purchasing Managers' Index came in at 49.9 in February versus 48.3 in January.

The loonie has been trading higher against its major counterparts in the Asian session.

The loonie fell to a weekly low of 1.3241 against the greenback and a 3-week low of 1.5069 against the euro, from its early 2-day high of 1.3130 and a 4-day high of 1.4920, respectively. The next possible support for the loonie is seen around 1.35 against the greenback and 1.50 against the euro.

The loonie dropped to 0.9405 against the aussie and 84.47 against the yen, off its early high of 0.9316 and near a 3-month high of 85.24, respectively. If the loonie falls further, 0.95 and 82.5 are likely seen as its next support levels against the aussie and the yen, respectively.

Looking ahead, U.S. ISM manufacturing index for February and University of Michigan's final consumer sentiment index for February are due shortly.