CANADA FX DEBT-C$ makes gains after in-line Canada GDP data

Fri Mar 1, 2013 9:33am EST
 
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* C$ at C$1.0309 to US$, or 97.00 U.S. cents

* Currency helped by GDP data; weak but as forecast

* C$ early hit C$1.0343, weakest since June

By Alastair Sharp

TORONTO, March 1 (Reuters) - The Canadian dollar pared early losses and traded stronger on Friday after domestic economic growth data for December and the fourth quarter came out in line with forecasts.

The Canadian economy chalked up another quarter of weak growth at the end of 2012, and shrank 0.2 percent in December for its first monthly decline since February 2012.

But given that economists have sharply lowered their expectations in recent weeks after a string of dour data, the currency actually strengthened slightly after the numbers.

"There may have been some players that were bracing for an even worse number than this and the possibility of a slight decline," said Paul Ferley, assistant chief economist at Royal Bank of Canada.

"That didn't happen, so that may be contributing to a bit of a bounce. But I wouldn't think the reaction will be all that long lived as the number just seems too close to expectations."   Continued...