3 Min Read
* C$ at C$1.0461 vs US$, or 95.59 U.S. cents * U.S. economy grew faster than expected in Q3 * U.S. jobless claims fell in latest week * ECB cut rates to record low * Bond prices rise across maturity curve By Solarina Ho TORONTO, Nov 7 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday after data showed the U.S. economy grew faster than expected in the third quarter and U.S. jobless claims fell in the latest week. The U.S. dollar rallied after data showed U.S. gross domestic product expanded at a 2.8 percent annual rate, the quickest pace since the third quarter of 2012. Economists had expected a 2.0 percent rate. Businesses restocked shelves during the quarter, but a slowdown in consumer and business spending pointed to some underlying weakness. The U.S. Labor Department suggested the jobs market continues to strengthen gradually. Initial claims for state unemployment benefits fell 9,000 to a seasonally adjusted 336,000 last week. "Better U.S. data certainly didn't hurt the big dollar's fortunes," said Benjamin Reitzes, senior economist and foreign exchange strategist at BMO Capital Markets. "The fact that (jobless) claims continued to be constructive after rising pretty sharply is a good sign for the U.S." Also surprising markets was the interest rate cut by the European Central Bank, which sent the euro falling to a seven-week low against the U.S. dollar. "The effect of it will be fairly marginal, but it's more of a symbolic move given that inflation has decelerated in Europe," said Mazen Issa, macro strategist TD Securities. "Certainly CAD (the Canadian dollar) has been one of the beneficiaries following that decision." The Canadian dollar at one point hit its firmest level against the euro in more than a month after the ECB cut its main refinancing rate to a record low of 0.25 percent. "The ECB cutting rates, it just reinforces the fact that the Bank of Canada is going nowhere (on rates) for a very long time," Reitzes said. The Canadian dollar, which mostly outperformed currencies other than the U.S. dollar, finished the North American session at C$1.0461 versus the greenback, or 95.59 U.S. cents, down from Wednesday's finish of C$1.0418, or 95.99 U.S. cents. It was trading around C$1.4031 versus the euro, or 0.7127 euro cents. Looking ahead, investors were eyeing North American jobs data for October due for release on Friday. Economists expect 125,000 jobs to have been added in the United States and 13,000 new jobs to have been created in Canada. Government bond prices were higher across the maturity curve, with the two-year bond rising 4.5 Canadian cents to yield 1.098 percent. The benchmark 10-year bond was up 15 Canadian cents to yield 2.519 percent.