* C$ at C$1.0620 vs US$, or 94.16 U.S. cents
* GDP 2.7 percent in 3rd quarter, vs forecast of 2.5 percent
* Bond prices lower across the maturity curve
By Leah Schnurr
TORONTO, Nov 29 (Reuters) - The Canadian dollar tumbled
against the greenback on Friday to its weakest level in over two
years, breaking through a key resistance level and adding to
recent bearish sentiment over the currency.
The loonie has suffered of late against a backdrop of a less
hawkish Bank of Canada, weaker oil prices and expectations that
the U.S. Federal Reserve will start to wind down its economic
stimulus.
The loonie had strengthened early in the session on Friday
after data showed the Canadian economy grew at its fastest pace
in two years in the third quarter. But that prompted
corporations to step in and buy U.S. dollars and sell off the
Canadian currency, said Scott Smith, senior market analyst at
Cambridge Mercantile Group in Calgary.
"With the steady up-trend we've seen since September, any
sort of dips in U.S. dollar-Canada dollar are being met with
real money demand," said Smith.
Lower liquidity the day after the U.S. Thanksgiving holiday
also made it easier to push the loonie lower, said Smith. U.S.
bond and equity markets closed early on Friday.
The Canadian dollar ended the North American
session at C$1.0620 to the greenback, or 94.16 U.S. cents,
weaker than Thursday's close of C$1.0587 or 94.46 U.S. cents.
The loonie traded as far as C$1.0629, its lowest level since
early October 2011. The low previously hit this year in July at
1.0609 had represented significant resistance for the currency.
"We've seen a very bearish sentiment in terms of the loonie
over the last few weeks," said Smith.
"To some extent that makes me feel like we could see a
retracement over the next couple sessions or week, just because
it seems like everyone and their dog is piling on the negative
data to the loonie right now."
A Goldman Sachs note earlier in the week suggested the
Canadian dollar could fall to C$1.14 a year from now.
Data early in the morning showed the Canadian economy grew
at a faster pace than expected in the last quarter at 2.7
percent annualized, driven mainly by consumer spending and
business inventory accumulation.
While the reading beat market forecasts, it also came on the
heels of a disappointing second quarter. Averaging the second
and third quarter gives a growth rate of a little over 2
percent, "a fair reflection of the underlying growth trend in
the economy," said Doug Porter, chief economist at BMO Capital
Markets in Toronto.
"The 2.7 is a bit of an outlier and I suspect it will come
down to earth somewhat in the fourth quarter," he said.
The two-year bond dipped 1-1/2 Canadian cents to
yield 1.097 percent, while the benchmark 10-year bond
was off 14 Canadian cents to yield 2.555 percent.