BUSINESS
04/26/2013 08:47 EDT | Updated 06/26/2013 05:12 EDT

Canadian dollar advances amid weaker than expected U.S. GDP report

TORONTO - The Canadian dollar advanced Friday amid data showing the U.S. economy was weaker than expected in the first quarter.

The loonie was up 0.38 of a cent to 98.34 cents US.

The U.S. government says gross domestic product grew at an annualized rate of 2.5 per cent in the January-March period, boosted largely by consumer spending.

That was a sharp improvement from the 0.4 per cent growth reported in the final quarter of the year, but analysts had hoped for growth of three per cent.

Other data showed a deterioration in consumer confidence in April.

A report released by the University of Michigan and Thomson Reuters gauged consumer sentiment in April at 76.4 per cent — its lowest since January.

March data came in at 78.6 per cent. The report measures consumers views on personal finances and buying trends.

Commodity prices weakened after oil and metals rose sharply over the past two sessions amid data showing U.S. oil inventories growing less than expected last week and a report from Goldman Sachs predicting a rebound in copper prices.

Hopes that the European Central Bank will cut interest rates next Thursday to boost the Continent's economy had also helped drive prices up.

The June crude contract on the Nymex fell 64 cents to US$93 a barrel and May copper was down five cents to US$3.18 a pound.

June gold bullion shed early gains to close down $8.40 to US$1,453.60 an ounce.