TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Friday, on news that Canada’s economy grew at a slower pace than expected in the fourth quarter.
Canada’s gross domestic product grew at an annualized rate of 0.4 percent in the fourth quarter, down from 2.0 percent in the third quarter and slower than the 1.2 percent rate expected by analysts, largely due to lower export prices of crude oil and crude bitumen, Statistics Canada said on Friday.
GDP edged down 0.1 percent in December as a result of reduced output across most goods-producing industries.
“It was softer than expected obviously, with the quarter up 0.4 percent in GDP terms,” said Nathan Janzen, senior economist at the Royal Bank of Canada. “It looks like a lot of the weakness can be attributed to softening of the oil patch. If you’re the Bank of Canada, it’s another reason to hold off on raising interest rates for a while.”
* At 8:55 a.m. EST (1355 GMT), the Canadian dollar was trading at 1.3226 to the greenback, or 75.61 U.S. cents, down about 0.5 percent from its level late on Thursday.
* The currency’s strongest level of the session was 1.3130, while its weakest was 1.3229.
* Canada’s economy posts 0.4 pct annualized Q4 growth.
* U.S. crude prices were down 0.23 percent to $57.09 a barrel, while Brent crude lost 0.21 percent to $66.17 a barrel.[O/R]
* Canadian government bond prices were higher across the maturity curve, with the two-year price up 4 Canadian cents to yield 1.758 percent and the benchmark 10-year rising 9 Canadian cents to yield 1.932 percent.
Reporting by Alden Bentley in New York; Editing by Paul Simao