Economic growth worries push loonie lower, traders look to rate announcement

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TORONTO – The Canadian dollar lost ground for a second day Friday after weak trade data from China raised fresh questions about overall global economic growth.

The loonie was down 0.42 of a cent to 91.08 cents US after falling almost half a cent on Thursday.

“China’s trade data disappointed, suggesting that GDP growth is likely to disappoint, even with new stimulus,” said Camilla Sutton, Chief FX strategist with Scotiabank Global Banking and Markets.

“For now the commodity currencies have essentially ignored this. However any further weakness in data releases next week would put downward pressure on commodity/growth currencies.”

Traders are now looking ahead to next week when the Chinese government releases its first quarter growth figures.

There was another sign of economic weakness in data out Friday, which showed that China’s growth in auto sales decelerated further in March with sales up 7.9 per cent to 1.7 million vehicles, down from February’s 11.3 per cent growth.

Markets will also be looking to next Wednesday when the Bank of Canada makes its next scheduled interest rate announcement.

Commodities were mixed as the May crude contract on the New York Mercantile Exchange climbed 34 cents to US$103.74 a barrel.

May copper was unchanged at US$3.05 a pound, while June bullion faded $1.50 to US$1,319 an ounce.

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