Canadian dollar notches biggest gain in one month as greenback slides
TORONTO, June 26 (Reuters) - The Canadian dollar strengthened to a nine-day high against its U.S. counterpart on Thursday as the greenback posted broad-based declines and ahead of domestic GDP data that could help guide expectations for additional easing from the Bank of Canada.
The U.S. dollar (.DXY), opens new tab fell to a three-year low against a basket of major currencies after a report that U.S. President Donald Trump had toyed with the idea of selecting and announcing Federal Reserve Chair Jerome Powell's replacement by September or October undermined faith in the soundness of the country's monetary policy.
Investors also weighed U.S. gross domestic product data that showed the economy shrinking at a downwardly revised annualized rate of 0.5% in the first quarter.
"It's simply a USD move today on the softer U.S. GDP revision along with the Shadow Fed Chair story," said Amo Sahota, director at Klarity FX in San Francisco. "I think trend traders will want to see how Canadian GDP turns out tomorrow. If it's strong then it looks like we are heading to a fresh USD-CAD low for the year."
The Canadian dollar was trading 0.7% higher at 1.3625 per U.S. dollar, or 73.39 U.S. cents, after touching its strongest intraday level since June 17 at 1.3619. It was the currency's biggest advance since May 23.
Canada's GDP report for April, due on Friday, is expected to show no change in the level of activity from March. Preliminary data on Thursday showed that wholesale trade fell 0.4% on a monthly basis in May, adding to recent evidence of a slowdown in the Canadian economy.
Investors see a nearly 40% chance of the Bank of Canada resuming its easing campaign at the next policy decision on July 30.
The price of oil , one of Canada's major exports, settled 0.5% higher at $65.24 a barrel, while Canadian bond yields moved lower across the curve, tracking moves in U.S. Treasuries.
The 10-year was down 3.8 basis points at 3.323%.
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