* C$ at C$1.0075 vs US$, or 99.26 U.S. cents
* Canada Feb GDP grew 0.3 pct, Jan also revised upward
* US$ weakens on expectations Fed will continue bond buying
* Weak data supports expectations ECB will cut interest rate
* Bond prices rise across curve
By Solarina Ho
TORONTO, April 30 The Canadian dollar touched
its highest level against the U.S. dollar in two and a half
months on Tuesday following the release of
stronger-than-expected Canadian gross domestic product data that
showed economic growth gained momentum in February.
Equity markets also rose, while the greenback slipped to a
two-month low on expectations the U.S. Federal Reserve will
continue its bond buying program and the European Central Bank
may cut its benchmark interest rate following disappointing
economic data. Both central banks will make policy announcements
"It's a generally positive tone for risk assets today," said
David Tulk, chief Canada macro strategist at TD Securities.
The Canadian dollar finished the North American
trading session at C$1.0075 versus the U.S. dollar, or 99.26
U.S. cents, not far from the currency's 100-day moving average
of C$1.0078. This was stronger than Monday's close at C$1.0116,
or 98.85 U.S. cents.
Canada's dollar reached C$1.0054, or 99.46 U.S. cents
earlier, its best performance against its U.S. counterpart since
Statistics Canada said on Tuesday that monthly GDP rose 0.3
percent in February, and the agency revised upward its growth
estimate for January, to 0.3 percent from 0.2 percent.
"The strength was pretty broad ... It brings in some upside
risks to our forecasts, there's no doubt about that," said
Robert Kavcic, senior economist at BMO Capital Markets, adding
that 2 percent quarterly growth is no longer impossible.
The hard-hit manufacturing sector continued to recover with
0.8 percent growth, while the end of a labor dispute in
professional hockey continued to boost the arts and
"(It's) a confirmation of our wider narrative that after
slowing quite sharply over the second half of 2012, the Canadian
economy's on a bit of an uptick, which is definitely
encouraging," said Tulk.
"The fact that we can come into (the second quarter) with a
little bit more momentum is reasonably constructive and that's
helped to lift the currency."
The price of Canadian government debt was higher across the
curve, with the two-year bond up 1.9 Canadian cents,
yielding 0.923 percent, and the benchmark 10-year bond
rising six Canadian cents to yield 1.695 percent.