CANADA FX DEBT-C$ posts 3rd straight weekly loss
* C$ at C$1.0530 vs US$, or 94.97 U.S. cents
* Currency slips 0.3 pct on week
* Investors buy greenback amid Syria tensions
* Canadian GDP tepid, but not as bad as expected
By Alastair Sharp
TORONTO, Aug 30 (Reuters) - The Canadian dollar ended steady against its U.S. counterpart on Friday, hurt as the United States made it clear it planned to punish Syria over a chemical weapons attack but helped by Canadian economic that was not as dismal as feared.
But the loonie, as Canada's currency is colloquially known, weakened 0.3 percent on the week, its third straight weekly decline.
Canadian gross domestic product data for the second quarter showed slowing growth, but it slightly exceeded forecasts despite a contraction in June.
Meanwhile, investors bought the greenback as a safe haven as U.S. President Barack Obama and Secretary of State John Kerry said President Bashar al-Assad's government was responsible for a poison gas attack in Damascus and must be punished.
"Markets remain fairly nervous over the Syria issue and whether there will be military action," said Blake Jespersen, a managing director of foreign exchange sales at BMO Capital Markets.
He said some of the trading flow was due to investors rebalancing their currency holdings at the end of the month.
GDP grew by 1.7 percent, annualized, in the second quarter, Statistics Canada said, hurt by a Quebec construction strike and flooding in Alberta. That was down from 2.2 percent growth in the first quarter.
Given that the report was no worse than economists had feared, the currency pared early losses after it was released.
"The concern was that we could get a downward surprise on the report, so this could provide modest support for the currency," said Paul Ferley, assistant chief economist at Royal Bank of Canada.
The currency ended the session changing hands at C$1.0530 to the U.S. dollar, or 94.97 U.S. cents, identical to its Thursday close.
The currency has benefited from rising oil prices, which were on track for their biggest monthly gain in a year, but that boost was offset by a flight to safe-haven currencies, such as the greenback amid escalating tensions in Syria.
"My view is that when we have these very high oil prices and geopolitical uncertainty, if you are going to pick a commodity currency, the Canadian dollar still looks like a pretty good candidate," said Stefane Marion, chief economist at National Bank Financial.
Prices for Canadian government debt were mixed, with the two-year bond flat to yield 1.194 percent, and the benchmark 10-year bond down 11 Canadian cents to yield 2.620 percent. Prices for bonds in the four-to-seven-year range rose.
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