3 Min Read
* C$ hits more than 2-week high after GDP data
* Canadian economy grows 3.5 pct annualized in Q3
* Global central banks announce liquidity moves
* Bond prices slip across curve in risk-on bid (Updates with details, comments)
By Claire Sibonney
TORONTO, Nov 30 (Reuters) - The Canadian dollar hit its strongest level in more than two weeks against the U.S. dollar on Wednesday after stronger-than-expected domestic growth data and coordinated action by major central banks to provide liquidity to the global financial system.
The currency CAD=D4 touched a session high of C$1.0124 against the U.S. dollar, or 98.78 U.S. cents, its firmest level since Nov. 14.
Data showed the Canadian economy grew at an annualized rate of 3.5 percent in the third quarter, recovering from a tsunami-linked 0.5 percent contraction in the second quarter. [ID:nN1E7AT05Q]
A Reuters survey of analysts had forecast a rise of 3.0 percent. By contrast, third quarter real gross domestic product (GDP) in the United States grew 2.0 percent.
"On a relative basis that stacks up very well globally. All in all it's CAD positive," said Camilla Sutton, chief currency strategist at Scotia Capital.
"It takes some burden off the Bank of Canada, but the Bank of Canada has warned us again and again that the real risk is global developments and that's front and center today."
Canada's primary dealers don't expect the central bank to resume raising interest rates until late next year or 2013, and traders pared back bets of future interest rate cuts following the GDP data. BOCWATCH
At 9:32 a.m. (1432 GMT), the Canadian dollar stood at C$1.0153 against the U.S. dollar, 98.49 U.S. cents, up from Tuesday's North American session close of C$1.0303 to the U.S. dollar, or 97.06 U.S. cents.
The currency was already on stronger footing heading into the GDP report, after global central banks announced a coordinated move to keep funds flowing through financial markets that are being rocked by Europe's escalating debt crisis. [MKTS/GLOB]
Canadian government bond prices retreated across the curve, tracking U.S. Treasuries lower amid dissolved safe-haven appetite. [US/]
The two-year bond CA2YT=RR fell 17 Canadian cents to yield 0.920 percent, while the 10-year bond CA10YT=RR dropped 40 Canadian cents to yield 2.170 percent. (With additional reporting by Jennifer Kwan; Editing by Jeffrey Hodgson)