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Why The Canadian Dollar Remains Under Selling Pressure

The Canadian dollar continues to experience selling pressure as economic growth, inflation, as well as employment all slow. CurrencyShares Canadian Dollar Trust (FXC) is down over 15% since July, as is seen in the chart below.

(click to enlarge)

Economic growth in Canada slowed in recent quarters as the price of oil fell, weighing on revenues in the country's large oil and gas production sector. In the third quarter, the economic growth figure came in at a 0.7% quarterly pace, below the previous quarter's reading of a revised 0.9%, while barely exceeding estimates of 0.6%. Below is a chart showing the annual change in the pace of real GDP per capita in Canada. After peaking in the fourth quarter of 2013 at 2.1% annual growth, the economic growth per capita figure broadly declined in 2014.

In January, the Bank of Canada cut its benchmark lending rate to both reflect falling… Read More …