Loonie lifted by U.S. economic data, commodities

Thu Oct 29, 2009 10:59am EDT
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By Jennifer Kwan

TORONTO (Reuters) - The Canadian dollar edged higher against the U.S. currency on Thursday morning, lifted by firm commodity prices and U.S. economic data that soothed worries about economic recovery.

A report on Thursday showed the U.S. economy grew in the third quarter for the first time in more than a year as government stimulus helped lift consumer spending and home building, fueling an unexpectedly strong advance.

The currency, which rallied off a three-week low reached overnight, also benefited from firmer North American equity markets and a weaker greenback.

"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 boost investor sentiment broadly and lifted the price of oil to around $79 a barrel, added Sutton, while gold prices were also higher.

"The impact toward currencies has been that the ones most weighted toward the global recovery -- so the commodity currencies -- are doing quite well," she said.

At 10:41 a.m. (1441 GMT), the Canadian unit was at C$1.0718 to the U.S. dollar, or 93.30 U.S. cents, up from C$1.0785 to the U.S. dollar, or 92.72 U.S. cents, at Wednesday's close.

The turnaround in the currency helped lift it off an overnight low of C$1.0822 to the U.S. dollar, or 92.40 U.S. cents, which marked its lowest level since October 5.   Continued...

<p>A Canadian one dollar coin, also know as a loonie, is shown in Montreal, April 28, 2006. REUTERS/Shaun Best</p>