Loonie down, greenback up on eurozone worries
Canadian dollars (loonies) are pictured in Vancouver, Sept. 22, 2011. THE CANADIAN PRESS/Jonathan Hayward
TORONTO - The Canadian dollar was lower Friday amid data showing economic growth in November dipped slightly.
The loonie was down 0.23 of a cent to 89.33 cents US as Statistics Canada reported that gross domestic product grew by 0.2 per cent, which was in line with expectations. That was down slightly from a 0.3 per cent gain in October.
Traders were in a risk-averse mood and the U.S. dollar was stronger across the board after data raised worries about the eurozone slipping into deflation.
Eurostat, the EU’s statistics office, reported that inflation in the eurozone fell to 0.7 per cent in the year to January from 0.8 per cent the previous month.
There are concerns that the eurozone could slip into a situation where prices are actually falling. Such a development can hurt an economy as consumers delay purchases and businesses postpone investment.
The deflation concerns added to emerging market worries that have buffetted markets this past week.
Countries including Turkey, South Africa, India and Russia have seen their currencies slide sharply over the past week. Traders worry that growth will slow and money will flow out of their economies as the U.S. Federal Reserve tightens its monetary policy.
Other economic data released Friday showed that U.S. consumer spending rose 0.4 per cent in December, compared with November when spending had increased an even stronger 0.6 per cent. That was the best gain in five months.
For all of 2013, income growth was 2.8 per cent, the weakest performance since 2009.
On the commodity markets, March crude in New York fell 89 cents to Us$97.34.
March copper lost two cents to Us$3.21 a pound while traders seeking safety pushed April gold up $11.80 to US$1,248.10 an ounce.