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(Corrects the headline and second paragraph to show the Canadian dollar was at its highest level in early one week, not three weeks)
* C$ hits high of 99.20 U.S. cents
* Bond prices lower across curve
* Canada GDP up 0.2 pct in October (Recasts, updates after data)
By Claire Sibonney
TORONTO, Dec 23 (Reuters) - Canada's dollar reversed earlier losses against the U.S. currency on Thursday as investors saw both domestic and U.S. economic data as reinforcing signs of growth in the fourth quarter.
The Canadian currency CAD=D4 rose as high as C$1.0081 to the greenback, or 99.20 U.S. cents, its strongest level in nearly a week.
The Canadian economy grew 0.2 percent in October after a brief downturn in September, due to an increase in mining and oil and gas extraction activity. The figure was slightly below analysts' calls for a 0.3 percent gain. [ID:nN23134993]
"The Canadian number ... was not as high as expectation but it was still an increase over the previous period, so it did definitely give some confidence that things are moving along well in Canada," said C.J. Gavsie, managing director of foreign exchange sales at BMO Capital Markets.
Also supporting Canada's risk-related currency, new U.S. claims for jobless benefits dipped last week and consumer spending increased in November for a fifth straight month, while consumer confidence perked up in December, rising to its highest level in six months. [ID:nN23135079]
However, Gavsie noted that the currency was being driven by relatively large orders from relatively few players in pre-holiday trade.
"Markets are definitely choppy to lead us out of the month," he said. "There's a considerable amount of volume but they tend to be lump sum orders that are coming in and press on the markets all at once, rather than the regular cash flow type of deals."
At 11:15 a.m. (1615 GMT), the Canadian currency CAD=D4 was at C$1.0093 to the U.S. dollar, or 99.08 U.S. cents, up from Wednesday's North American session close of C$1.0142 to the U.S. dollar, or 98.60 U.S. cents.
Canadian bond prices were mildly lower given the fairly positive economic data, tracking U.S. Treasuries as dealers prepared for new supply next week. [US/]
The two-year bond CA2YT=RR was down 7 Canadian cents to yield 1.703 percent, while the 10-year bond CA10YT=RR slipped 21 Canadian cents to yield 3.194 percent.
In an interview published on Thursday, Finance Minister Jim Flaherty told Reuters he took note of "great demand" for two Canadian foreign-currency denominated bonds. [ID:nN23134240] (Reporting by Claire Sibonney; editing by Peter Galloway)