BUSINESS

Canadian dollar lower amid positive U.S. growth data, higher oil prices

10/26/2012 08:53 EDT | Updated 12/26/2012 05:12 EST
TORONTO - The Canadian dollar closed lower Friday as the U.S. dollar strengthened after a report on the American economy was better than expected.

The loonie lost 0.41 of a cent to 100.2 cents US after a report showing U.S. economic growth picked up momentum in the third quarter.

The U.S. gross domestic product rose at a rate of two per cent in the third quarter, better than the 1.8 per cent increase that economists expected. It was also improved from the tepid 1.3 per cent growth posted for the second quarter.

However, analysts noted that the two per cent rise was driven largely by a jump in government spending and the housing sector.

The commodity-sensitive currency was pressured by commodity prices, which have headed sharply lower this week as traders worry about demand prospects amid a slowing global economy.

Oil prices closed slightly higher following the release of the GDP report with the December crude contract on the New York Mercantile Exchange up 23 cents to US$86.28 a barrel. Crude fell 4.6 per cent this week amid data showing much higher than expected inventories.

The December copper contract reversed early gains and was unchanged at US$3.55 a pound. Copper, viewed as an economic barometer, has tumbled almost 20 cents in the past week on worries about a slowing global economy.

December bullion faded $1.10 to US$1,711.90 an ounce.