CANADA FX DEBT-C$ edges higher on oil price, domestic GDP data
* Canadian dollar at C$1.1630 or 85.98 U.S. cents * Bond prices lower across the maturity curve (Adds details, quotes, updates prices) By Leah Schnurr OTTAWA, Dec 23 (Reuters) - The Canadian dollar firmed modestly against the greenback on Tuesday, helped by a pick-up in oil prices and data showing stronger-than-expected Canadian economic growth in October. The loonie's gains, however, were tempered by revised figures that showed growth in U.S. third-quarter gross domestic product at an annualized 5 percent, the fastest pace in 11 years. The report bolstered the U.S. dollar and was the main focus of financial markets. Overall, the Canadian dollar stuck to its recent trading range as volumes were winding down heading toward the end of a holiday-shortened week. Canadian bond and equity markets will close early on Wednesday before the Christmas and Boxing Day holidays. The final Canadian economic report of the year showed GDP rose 0.3 percent in October, helped by a surprising surge in manufacturing. "The month-over-month results do show growth at a time when most people would have expected the Canadian economy to struggle, so the growth has been positive and we're seeing a reaction in the loonie," said Lennon Sweeting, corporate dealer at USForex in San Francisco. The Canadian dollar ended the North American session at C$1.1630 to the greenback, or 85.98 U.S. cents, stronger than Monday's close of C$1.1637, or 85.93 U.S. cents. The day's slight gain pales in comparison with the loonie's long retreat over the past six months in the face of plunging oil prices. The Canadian dollar is down 8.6 percent for 2014, putting it on track for its worst year since 2008, as it has been hit hard by the drop in the price of oil, a major Canadian export. The strong U.S. growth figures gave oil a reprieve on Tuesday, with crude settling up $1.86 at $57.12 a barrel. Analysts expect the loonie will push lower in 2015 as an expected interest rate increase in the United States will whet investor appetite for the greenback. The Bank of Canada is expected to lag the U.S. Federal Reserve in raising rates. Sweeting expects the Canadian dollar could weaken toward C$1.18 in first half of next year. Canadian government bond prices were lower across the maturity curve, with the two-year down 8 Canadian cents to yield 1.057 percent and the benchmark 10-year down 96 Canadian cents to yield 1.903 percent. (Editing by Peter Galloway)
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