* C$ at C$1.0368 to US$, or 96.45 U.S. cents
* Loonie slips 0.4 pct this week, down 2.9 pct in May
* Q1 GDP growth beats expectations, BOC forecast
* C$ hits strongest level in two years vs Aussie
By Alastair Sharp
TORONTO, May 31 The Canadian dollar ended weaker
against the U.S. dollar on Friday, as supportive data showing
the Canadian economy grew at a faster-than-expected pace in the
first quarter was more than offest by upbeat U.S. data that
boosted the greenback.
The loonie, as Canada's currency is colloquially known,
closed at C$1.0368 to the greenback, or 96.45 U.S.
cents, much lower that the C$1.0300 level at Thursday's North
The Canadian currency slipped 0.4 percent this week and
ended the month 2.9 percent lower than it started it.
The currency got an early boost from the Canadian GDP data,
but that faded on the release of similarly strong U.S. numbers.
"We're not used to it moving so much, especially being so
volatile, up and down a few times today. It was like the good
old days," said Steve Butler, a director of foreign exchange
trading at Scotiabank.
Butler said the Canadian currency is more likely to test
further weakness around C$1.05 than to return to near equal
value with the U.S. dollar in the next few weeks.
In the morning, data showed stronger exports helped rouse
the Canadian economy from its sluggish end to 2012, with
annualized economic growth of 2.5 percent exceeding the median
projection of analysts in a Reuters poll and easily beating the
central bank's lowered forecast.
But the fine print of the GDP was less impressive than the
headline, and currency traders later sold off the loonie, a move
exacerbated by improved factory activity in the U.S. Midwest
boosting the greenback.
The loonie had better luck against other commodity-linked
peers, touching its strongest level against the Australian
dollar in more than two years.
It has had a rough time this month, falling as traders
assume Canada's economy would lag its southern neighbor's growth
and as expectations grew for a slowdown in the U.S. Federal
Reserve's monetary stimulus efforts.
That thesis has led bond yields on U.S. government debt to
spike sharply, helping the greenback gain over the loonie by
attracting global capital flows.
Prices for Canadian government debt were mixed on Friday.
The two-year bond slipped less than a Canadian cent
to yield 1.082 percent, while the benchmark 10-year bond
added 3 Canadian cents to yield 2.064 percent.