How will US credit rating downgrade effect on canadian dollar : The Canadian dollar fell to its weakest level since July 18 on Tuesday morning after U.S. data showed consumer spending fell in June, adding to a sell-off of the Canadian currency that came after the U.S. budget deal.
Two days of weak U.S. data shifted investor focus back to tepid growth prospects for Canada's largest trading partner and followed a weekend deal by U.S. lawmakers that will lead to more than $2 trillion in spending cuts.
The Canadian currency was at $0.9597 to the U.S. dollar, or $1.0420, in early trade, down from the C$0.9555 close on Friday. Canadian markets were closed on Monday for a civic holiday.
The currency hit its weakest point since July 18 earlier in the session, at C$0.9619, after U.S. data showed consumer spending fell unexpectedly in June, dimming growth prospects.
"The market has been busy trying to digest everything going on the U.S. and the supposed relief over the debt situationmbeing resolved, pending today's vote, was very short-lived,
A wealth of data is due out this week in both Canada and the United States, including much-watched employment reports for both countries on Friday.
But the downgrade is still bad news. It is proof that the U.S. economy is not growing as rapidly as it has in the past, and as we all have heard many times, the government has been living beyond its means. Now we have to make up for it, both in our reputation and in dollars and cents
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