Reuters: US Dollar Report: CANADA FX DEBT-C$ extends gains to 2-wk high as growth data tops forecasts

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CANADA FX DEBT-C$ extends gains to 2-wk high as growth data tops forecasts Apr 30th 2013, 13:49 Tweet Share this Email Print Tue Apr 30, 2013 9:49am EDT * C$ at C$1.0100 vs US$, or 99.01 U.S. cents * Canada Feb GDP grew 0.3 pct, Jan also revised upward to 0.3 pct * Euro hit by weak data; fuels expectations of ECB rate cut * Bond prices rise across curve By Solarina Ho TORONTO, April 30 (Reuters) - The Canadian dollar firmed to a two-week high against the U.S. dollar on Tuesday after the release of stronger-than-expected domestic gross domestic product data that showed economic growth gained momentum in February. Monthly GDP by industry grew 0.3 percent, Statistics Canada said Tuesday, which also revised upward its growth estimate for January, to 0.3 percent from 0.2 percent. The hard-hit manufacturing sector continued to recover with 0.8 percent growth, while the end of a labor dispute in professional hockey continued to boost the arts and entertainment sector. "The strength was pretty broad. We saw very strong growth in mining, which tends to be a little bit more volatile ... It brings in some upside risks to our forecasts, there's no doubt about that," said Robert Kavcic, senior economist at BMO Capital Markets, adding that 2 percent quarterly growth is no longer impossible. "We haven't seen 2 percent growth on a quarterly basis in the Canadian economy for some time ... it was definitely positive for the currency." At 9:34 a.m. (1334 GMT), the Canadian dollar was trading at C$1.0100 versus the U.S. dollar, or 99.01 U.S. cents, stronger than shortly before the data was released and stronger than Monday's finish at C$1.0116, or 98.85 U.S. cents. The U.S. dollar also continued to be pressured by expectations the Federal Reserve's ultra-loose monetary policy will be maintained at two-day talks ending Wednesday. The Canadian dollar was outperforming most other currencies, and touched its strongest level against the euro in about two weeks. The euro zone common currency weakened after poor economic data added to expectations the European Central Bank will cut interest rates this week. The price of Canadian government debt was higher across the curve, with the two-year bond up just shy of a Canadian cent, yielding 0.929 percent, and the benchmark 10-year bond gaining 11 Canadian cents to yield 1.690 percent. Tweet this Link this Share this Digg this Email Reprints Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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