03/03/2015 09:31 EST | Updated 05/03/2015 05:59 EDT

Canadian dollar gets bump from GDP data, ahead of central bank rate decision

TORONTO - The Canadian dollar moved higher Tuesday after the latest data on the domestic economy showed growth came in better than expected.

The loonie ended the day ahead 0.28 of U.S. cent to 80.06 cents.

Statistics Canada says that domestic economic growth slowed to 2.4 per cent in the final three months of last year. The data was stronger than economists had expected for a period where rapidly declining oil prices weighed heavily on growth.

In December, gross domestic product moved up 0.3 per cent to beat economist expectations of 0.2 per cent.

"The twin GDP reports are encouraging and highlight that the Canadian economy was doing pretty well even amid the initial drop in oil prices," BMO Capital Markets senior economist Benjamin Reitzes said in a note.

"However, that strength isn't expected to last, with the early 2015 data likely to soften."

Meanwhile, investor attention is shifting towards the Bank of Canada's benchmark interest rate decision on Wednesday morning.

Economists widely expect the central bank will hold the benchmark overnight rate steady, after a surprise cut in January.

Last week, bank governor Stephen Poloz made clear in a speech that the recent move was designed to help buy the bank time to assess the impact of the collapse of oil prices on the economy.

He also indicated that the bank will remain on hold for the time being.