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* C$0.9870 vs the US$, or $1.0132
* Currency shrugs off GDP data
* Bond prices rise across the curve
By Jennifer Kwan
TORONTO, March 2 (Reuters) - The Canadian dollar retreated against its U.S. counterpart on Friday after a string of gains this week as currency traders largely shrugged off muted domestic fourth-quarter growth data.
Canadian economic growth slowed to an annualized 1.8 percent in the fourth quarter of 2011 from a sharply upwardly revised 4.2 percent in the third period, as positive temporary factors faded and government stimulus continued to wind down.
The 1.8 percent real growth rate matched forecasts in a Reuters survey but fell short of the 2.0 percent pace that the Bank of Canada predicted in its January Monetary Policy Report. U.S. growth was 3.0 percent in the fourth quarter.
"It's pretty much expected and overall growth is still fairly modest. This is a little bit stale, dated in the sense that it's backwards looking," said Camilla Sutton, chief currency strategist at Scotia Capital.
"There's nothing in the data release that would be concerning. I think that's positive, but it's likely a CAD neutral."
Around 9 a.m. (1400 GMT), the Canadian dollar was at C$0.9870 versus the U.S. dollar, or $1.0132, down from Thursday's North American session finish at C$0.9859 versus the U.S. dollar, or $1.0143.
Still, the Canadian dollar has appreciated more than 2 U.S. cents against the greenback since Monday, from a low of C$1.0050 to a more than five-month high of C$0.9842 on Thursday. The gains came on the back of a huge cash injection by the European Central Bank, solid U.S. labor market data and elevated oil prices.
"A lot of clients have seen the improving U.S. economic data, they've seen oil prices moving a lot higher and I think the Canadian dollar just becomes a much more attractive place to invest," said Blake Jespersen, managing director of foreign exchange sales at BMO Capital Markets.
"I think sentiment has really changed this week towards the Canadian dollar, it's appreciated considerably against some of the major currencies, the yen, the euro. We're seeing a lot of money coming back into Canada."
He said resistance for the Canadian currency was in place around C$0.9850 and support was seen holding between C$0.9915-80.
On the crosses, the Canadian dollar surged to a 7-month high versus the yen after data showed persistent negative price pressures in Japan that are likely to keep the Bank of Japan's focus on monetary easing and to undermine the currency. Analysts noted the currency was the best performer against the crosses for the week.
Canadian bond prices edged higher across the curve, with the two-year bond up 1 Canadian cent to yield 1.117 percent. The 10-year bond added 12 Canadian cents to yield 1.991 percent.