CANADA FX DEBT-C$ strengthens after in-line Canada GDP data

Fri Mar 1, 2013 4:50pm EST
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* C$ ends at C$1.0271 to US$, or 97.36 U.S. cents

* Currency helped by GDP data; weak but as forecast

* C$ early hit C$1.0343, weakest since June

By Solarina Ho

TORONTO, March 1 (Reuters) - The Canadian dollar strengthened on Friday, rebounding from an early decline to its lowest level since late June, after fourth-quarter domestic growth data came in as forecast.

The Canadian economy chalked up another quarter of weak growth at the end of 2012, and shrank 0.2 percent in December for its first monthly decline since February 2012.

But because economists had sharply lowered their expectations in recent weeks, the currency actually strengthened after the numbers were released.

"A lot of investors were going into the data thinking it would be even worse," said Charles St-Arnaud, Canadian economist and currency strategist at Nomura Securities International in New York.

In the medium term, however, St-Arnaud said he expected to see more weakness in the Canadian dollar. He said one factor weighing on the currency is that Canada keeps importing oil for Eastern refineries at a higher price than it exports from Western Canada.   Continued...