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Canadian dollar weakens 0.1% against the greenback
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Touches its strongest level since Feb. 21 at 1.3508
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Canadian GDP rises 0.5% in January
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Canadian bond yields ease across curve
(Adds analyst quotes and details throughout; updates prices)
By Fergal Smith
TORONTO, March 31 (Reuters) - The Canadian dollar edged
lower against its U.S. counterpart on Friday, but the currency
was holding near its strongest level in more than five weeks as
Wall Street climbed and domestic data showed the economy growing
at a faster-than-expected pace.
The loonie was trading 0.1% lower at 1.3535 to the
greenback, or 73.88 U.S. cents, after touching its strongest
intraday level since Feb. 21 at 1.3508.
For the month, the currency advanced 0.8%, while it is up
0.1% since the start of the year.
"With equities continuing to march higher as financial
markets stabilize from the recent banking sector gyrations, we
have seen some of the cyclical currencies such as CAD benefit as
the USD weakens on a broader-based basis," said George Davis,
chief technical strategist at RBC Capital Markets.
The S&P 500 index was set to end its second straight quarter
on a high note as evidence of cooling U.S. inflation further
supported hopes of a softer monetary policy approach from the
Federal Reserve in light of recent problems in the banking
sector.
The Canadian dollar was also supported by domestic data that pointed to stronger economic growth in the first quarter than the Bank of Canada has projected, Davis said.
The Canadian economy expanded 0.5% in January, eclipsing the 0.3% increase economists had expected, while preliminary data for February showed GDP advancing by a further 0.3%.
The price of oil, one of Canada's major exports, settled 1.8% higher at $75.67 a barrel, adding to its recent gains, while Canadian government bond yields eased across the curve, tracking the move in U.S. Treasuries. The 10-year fell 4.8 basis points to 2.888%. It was trading about 60 basis points below the equivalent U.S. rate, the narrowest gap since March 2. (Reporting by Fergal Smith; Editing by Frances Kerry and Paul Simao)
