“The volatility comes on the back of the rhetoric that’s coming primarily from Europe, but even before that from Asia,” said Jack Spitz, managing director of foreign exchange at the National Bank of Canada by phone from Toronto. “Juncker’s comments, Nowotny’s comments yesterday and overnight are creating volatility in the intraday market from a euro perspective and it’s affecting a number of currencies, not least of which is the Canadian dollar.”
A reading of the cost of living in the U.S. was little changed in December, indicating the U.S. economy is not growing fast enough to spark fears of inflation.
The German government cut its growth forecast for Europe’s biggest economy on cooling demand for exports. German gross domestic product growth will slow to 0.4% this year from 0.7% in 2012, the Economy Ministry said in its annual report, compared with a previous forecast for 1% expansion.
The loonie has fallen 1.3% during the past six months versus nine developed-nation peers tracked by Bloomberg Correlation-Weighted Indexes. The greenback has dropped 4.4%.
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