Canadian dollar advances in wake of strong U.S. economic growth data

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TORONTO — The Canadian dollar was higher Wednesday as the latest data showed stronger-than-expected U.S. economic growth during the third quarter.

The loonie rose 0.08 of a cent at 89.44 cents US as growth in the July-September period came in at an annualized pace of 3.5 per cent. Economists had expected a gain of three per cent.

Traders will also find out this week how the Canadian economy fared during August. Statistics Canada is expected to report Friday that gross domestic product for the month came in flat.

Commodity prices were lower with gold prices under selling pressure after the U.S. Federal Reserve on Wednesday said its third instalment of quantitative easing would conclude by month’s end. The massive program of buying bonds and mortgage backed securities was seen as a huge benefit to stock markets in the years following the 2008 financial crisis as it kept long-term rates low.

At the same time, the Fed said it would continue to keep short-term rates low for a “considerable period.”

Quantitative easing also helped support higher gold prices because of worries the stimulus program would stoke inflation. But prices continued to retreat Thursday morning and the December gold contract dropped $21.60 to US$1,203.10 an ounce.

Commodity prices also suffered from a U.S. dollar that gained strength following the Fed announcement.

The December crude oil contract lost 86 cents to US$81.34 a barrel while the December copper contract was down five cents to US$3.05 a pound.