Canadian dollar rises on GDP data, bonds eye U.S. jobs
By Ka Yan Ng
TORONTO (Reuters) - The Canadian dollar rose for a third straight session against the U.S. dollar on Wednesday after data showed the economy grew at a faster than expected clip in January.
Canada's gross domestic product rose by 0.6 percent in January from December, led by widespread gains in manufacturing, as well as strong wholesale trade, construction, retail sales and finance, Statistics Canada said. Analysts polled by Reuters had expected month-on-month GDP growth of 0.5 percent.
"The January GDP print was just another piece in the long line of solid 2010 data," said Sacha Tihanyi, currency strategist at Scotia Capital, noting that the Canadian currency's movement was choppy but in a very tight range.
He said it was likely that liquidity will probably start becoming a bit more strained ahead of the U.S. nonfarm payrolls report for March on Friday, when Canada will be closed for the Good Friday holiday.
The currency rose as high as C$1.0125 to the U.S. dollar, or 98.77 U.S. cents, then mirrored the volatility in the price of oil, an important Canadian export whose direction sometimes drives the currency.
As crude settled higher, so did the Canadian dollar.
The Canadian dollar ended at C$1.0158 to the U.S. dollar, or 98.44 U.S. cents, up from C$1.0195 or 98.09 U.S. cents at Tuesday's close.
The GDP data confirms economists' view that the economic rebound is more robust than expected. After a stunning 5 percent annualized growth in the fourth quarter, most economic data has been surprisingly strong. Continued...