Canadian dollar steady after monthly Canada economic data

Fri Sep 28, 2012 9:36am EDT
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By Claire Sibonney

TORONTO (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Friday as attention turned from Spain's new budget to the next tests for the euro zone and North American economic data heading into the month and quarter's end.

Canadian government data showed that the country's economy grew by an inflation-adjusted 0.2 percent in July on strength in manufacturing, utilities and wholesale and retail trade.

The results exceeded analysts' expectations, but June growth figures were revised down, leaving actual gross domestic product in July almost exactly as forecast.

"The economy is continuing to expand, but the pace at around 2 percent is very modest and not going to provide much downward pressure on the unemployment rate," said Paul Ferley, assistant chief economist At Royal Bank of Canada.

"With the revision, the overall pace is still fairly moderate (and) argues for the Bank of Canada to continue to keep monetary conditions highly stimulative."

The Canadian dollar initially strengthened immediately after the data, but quickly retreated back near Thursday's close.

At 9:08 a.m. (1308 GMT), the Canadian dollar was trading at C$0.9810 versus the U.S. dollar, or $1.0194, little changed from Thursday's North American session close at C$0.9809 to the U.S. dollar, or $1.0195.

Matt Perrier, a director of foreign exchange sales at BMO Capital Markets, noted recent Canadian dollar support around C$0.9855-60 and resistance at around C$0.9730-80.   Continued...