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Canadian dollar slips as U.S. economic data improve


The Canadian dollar closed lower Friday as the U.S. dollar strengthened after a report on the U.S. economy was better than expected.

The loonie lost 0.41 of a cent to $1.002 (U.S.) after a report showing U.S. economic growth picked up momentum in the third quarter.

The U.S. gross domestic product rose at a rate of 2 per cent in the third quarter, better than the 1.8 per cent increase that economists expected. It was also improved from the tepid 1.3 per cent growth posted for the second quarter.

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However, analysts noted that the 2 per cent rise was driven largely by a jump in government spending and the housing sector.

The commodity-sensitive currency was pressured by commodity prices, which have headed sharply lower this week as traders worry about demand prospects amid a slowing global economy.

Oil prices closed slightly higher following the release of the GDP report with the December crude contract on the New York Mercantile Exchange up 23 cents to $86.28 a barrel. Crude fell 4.6 per cent this week amid data showing much higher than expected inventories.

The December copper contract reversed early gains and was unchanged at $3.55 a pound. Copper, viewed as an economic barometer, has tumbled almost 20 cents in the past week on worries about a slowing global economy.

December bullion faded $1.10 to $1,711.90 an ounce.

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