3 Min Read
* C$ rises to finish at C$1.0670 to the U.S. dollar
* U.S. Q3 growth helps boost investor sentiment
* Market eyes Canadian GDP data due Friday
* Bond prices lower across curve (Update to close, adds details, quote)
By Jennifer Kwan
TORONTO, Oct 29 (Reuters) - The Canadian dollar rose against the U.S. currency on Thursday after data showed the U.S. economy grew faster than expected in the third quarter, soothing worries about economic recovery and encouraging moves away from the safe-haven U.S. dollar.
The Canadian currency, which rallied off a three-week low reached overnight, also benefited from a rally in North American equity markets.
The third quarter was the first quarter of growth in the U.S. economy in more than a year as government stimulus helped lift consumer spending and home building, which fueled an unexpectedly strong advance in gross domestic product. [ID:nN29354547]
"The biggest mover today was the GDP release from the U.S.," said Camilla Sutton, currency strategist Scotia Capital. "It has investors back into risk-seeking mode."
The U.S. report helped to lift the price of oil above $79 a barrel, added Sutton, while gold prices were also higher. [O/R] [GOL/]
Canada is a key exporter of commodities and movements in prices often sway Canadian dollar direction.
"The impact toward currencies has been that the ones most weighted toward the global recovery -- so the commodity currencies -- are doing quite well," Sutton said.
The Canadian dollar finished at C$1.0670 to the U.S. dollar, or 93.72 U.S. cents, up from C$1.0785 to the U.S. dollar, or 92.72 U.S. cents, at Wednesday's close.
Overnight the currency hit a low of C$1.0822 to the U.S. dollar, or 92.40 U.S. cents, which was its lowest level since Oct. 5.
Investors will now look to monthly Canadian GDP data, due for release on Friday at 8:30 a.m. (1230 GMT). The numbers are expected to show the economy grew 0.1 percent in August after stagnating in July.
Canadian bond prices, lacking the influence of major domestic economic data, followed the bigger U.S. Treasury market lower. [US/]
Figures on Thursday showed weakness in the oil market and strength in the Canadian dollar helped depress Canada's industrial product prices in September, but the report was not a major market mover [ID:nN29397459], said Sheldon Dong, fixed income analyst at TD Waterhouse Private Investment.
"U.S. GDP was stronger than expected and I think that gave the risk markets a bit of a lift there," he said.
The two-year bond CA2YT=RR slumped 6 Canadian cents to C$99.56 to yield 1.466 percent, while the 10-year bond CA10YT=RR fell 43 Canadian cents to C$102.00 to yield 3.502 percent. (Editing by Peter Galloway)