BUSINESS

Canadian dollar slips amid ECB rate cut, stronger than expected U.S. growth

11/07/2013 08:48 EST | Updated 01/23/2014 06:58 EST
TORONTO - The Canadian dollar closed lower Thursday while the greenback gained ground after the European Central Bank cuts its key lending rate to a record low and data showed U.S. economic growth in the third quarter was much stronger than expected.

The loonie was off 0.4 of a cent to 95.59 cents US as gross domestic product rose at an annualized rate of 2.8 per cent in the quarter, against the two per cent rise that economists had expected.

The ECB cut its key rate to 0.25 per cent from 0.5 per cent. The surprise move came as recent economic data, such as lower than expected inflation of 0.7 per cent in the 17-country eurozone, have suggested that Europe’s economic recovery remains weak.

But most economists thought the bank would wait at least until December when it will have new forecasts from its own staff before offering more economic stimulus.

Traders also looked to the release Friday of the U.S. government’s employment report for October.

The GDP report and the jobs data will help the Federal Reserve decide whether to start cutting back on its US$85 billion of monthly bond purchases later this year.

Currency traders will also take in the latest Canadian employment data on Friday.

Commodity prices were mixed as December crude oil on the New York Mercantile Exchange declined 60 cents to US$94.20 a barrel.

December copper was ahead one cent at US$3.25 a pound while December gold bullion fell $9.30 to US$1,308.50 an ounce.