WRAPUP 1-Canada hit by big trade deficit, low purchasing activity

Tue Jan 7, 2014 11:09am EST
 
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* Purchasing activity drops for second month in a row

* Dollar drops to lowest against greenback since 2010

* Canada exports flat, imports edge up by 0.1 percent

* Canada posts 23rd consecutive monthly trade deficit

By David Ljunggren

OTTAWA, Jan 7 (Reuters) - Prospects for Canada's economy dimmed on Tuesday with news that activity by purchasing managers nosedived unexpectedly in December, while the country posted a big trade deficit a month earlier.

The double dose of bearish news helped push the Canadian dollar to its weakest level against the U.S. dollar since 2010.

The currency - already hit by the poor trade figures - fell to C$1.0763 to the greenback, or 92.91 U.S. cents, down from C$1.0713 to the U.S. dollar, or 93.34 U.S. cents, just before the purchasing figures were released.

In late October the Bank of Canada - concerned about the economy's sluggish performance and low inflation - said it expected annualized GDP growth in the fourth quarter to be 2.3 percent, down from 2.7 percent in the third.   Continued...