(The Canadian Press) TORONTO – The Canadian dollar advanced Thursday as growth for August came in higher than economists had forecast.
The loonie was up 0.38 of a cent to 95.76 cents US after Statistics Canada reported that gross domestic product grew by 0.3% in August against the 0.2% rise that was expected.
That meant the economy grew at an annualized pace of 2.0%, versus a consensus of 1.7%.
Meanwhile, there was uncertainty on financial markets after Wednesday's announcement from the U.S. Federal Reserve left traders with the impression that the central bank could start tapering its US$85 billion monthly bond purchasing scheme as early as December.
The Fed said it would maintain the program for now but hinted that tapering could occur earlier than many investors thought. There had been hopes that the Fed wouldn't move until at least March, well after Janet Yellen has taken over the reins at the central bank.
Any hint of withdrawing the asset purchases has had a negative effect on markets because the quantitative easing program has kept long-term rates low, leaving investors to pour more money into stocks which in turn has fired a strong rally on many equity markets.
December crude was down 66 cents to US$96.11 following a tumble of almost $1.50 Wednesday in the wake of data showing a much bigger than expected rise in U.S. inventories last week.