TORONTO - The Canadian dollar was higher Friday morning amid data showing the economy slowed more than expected in December but 2013 growth still turned out to be respectable.
The loonie was up 0.21 of a cent to 90.01 cents US amid general U.S. dollar weakness.
Statistics Canada reported that fourth quarter economic growth came in at an annualized pace of 2.9 per cent. That was better than the 2.5 per cent rise that was expected. But gross domestic product contracted by 0.5 per cent in December, more than the 0.3 per cent drop that economists expected.
In the U.S., the first revision to fourth quarter GDP showed that the economy grew at an annualized rate of 2.4 per cent, matching expectations but down sharply from the original 3.2 per cent reading.
By contrast, Statistics Canada raised its initial estimates for the first two quarters of 2013 and said the overall growth rate for the year was 2.0 per cent — the highest since 2011.
The full-year advance was also three-tenths of a point higher than what the Bank of Canada or Finance Minister Jim Flaherty's budget introduced earlier this month had predicted.
Meanwhile, European data showed the inflation rate in the 18-country eurozone held steady at an annual rate of 0.8 per cent in February, which eased immediate concerns that the currency union is sliding into deflation, a sustained drop in prices.
Traders will also take in the latest reading on consumer confidence when the University of Michigan releases its widely-watched index mid-morning.
Investors are keeping an eye on the crisis in Ukraine following accusations by the country’s new interior minister, Arsen Avakov, that Russian military were blocking a Ukrainian military airport in the Black Sea port of Sevastopol in Crimea.
IG market analyst Stan Sahmu said that while traders for now are focused on economic indicators, “the Ukraine situation seems to be escalating in the background and could haunt markets in coming weeks.”
On the commodity markets, the April crude contract on the New York Mercantile Exchange declined 33 cents to US$102.07 a barrel.
May copper was unchanged at US$3.20 a pound while April bullion ticked a dime higher to US$1,331.90 an ounce.