The Canadian dollar strengthened against its U.S. counterpart on Friday as oil prices rose and data showed the domestic economy growing faster than expected in November, with the loonie clawing back some of this week’s decline.
The Canadian economy grew by 0.7% in November, surpassing estimates for a 0.4% gain, data from Statistics Canada showed. A preliminary estimate pointed to a 0.3% advance for December GDP, while fourth-quarter annualized growth was seen at 7.8%.
Last week, the Bank of Canada projected fourth-quarter growth of 4.8%. The unprecedented liquidity injected into the financial system from the BoC’s bond purchases has pushed some money market rates below the central bank’s targeted interest rate, and analysts say the pressure will persist until the quantitative easing program is scaled back.
Commodities are holding in, oil is unchanged and gold and silver trading higher. The sell off in U.S. equities stopped the Canadian from moving higher.
Expect a bit of volatility today.