Canadian dollar slips after weak Canada GDP, U.S. consumer data

Fri Nov 30, 2012 5:02pm EST
 
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By Alastair Sharp

TORONTO (Reuters) - The Canadian dollar weakened marginally against the U.S. currency on Friday as domestic economic growth data disappointed the market and a fall in U.S. consumer spending pointed to troubles ahead for Canada's biggest export market.

The resource-linked currency saw some interest based on bets that Ottawa will approve a Chinese company's $15.1 billion acquisition of energy producer Nexen Inc NXY.TO next month, one analyst said.

"You may be getting some pre-positioning ahead of the Nexen decision that's coming up in a couple of weeks, with many thinking that the government will approve that," said John Curran, senior vice president at CanadianForex.

A Canadian cabinet member known to have reservations about the bid to buy Nexen said Friday that at least some of Canada's concerns about getting reciprocal treatment from China have been addressed by an investment pact.

But the broader influences on the currency were negative as figures showed Canadian economic growth was weak in the third quarter, and that U.S. consumers spent less in October.

"On a cross basis the Canadian dollar is doing OK, but against the U.S. it's just a non-event," Curran said, pointing to gains against the Japanese yen, British pound and New Zealand dollar.

The Canadian currency, acutely sensitive to signs of stagnation in the global economy, ended trade at C$0.9936 to the greenback, or $1.0064, compared with C$0.9928, or $1.0073, at Thursday's North American close.

That meant it recorded a slight 0.2 percent loss against the U.S. dollar for the week but firmed 0.7 percent against the greenback over the month.   Continued...