TORONTO: The Canadian dollar closed lower against its US counterpart on Friday, after news that Canada's economy grew at a slower-than-forecast pace in the fourth quarter lowered expectations the Bank of Canada would raise interest rates any time soon.
Canada's gross domestic product grew at an annualized rate of 0.4 percent in the fourth quarter, down from 2.0 percent in the third quarter and slower than the 1.2 percent rate expected by analysts, largely due to lower export prices of crude oil and crude bitumen, Statistics Canada said on Friday.
GDP edged down 0.1 percent in December as a result of reduced output across most goods-producing industries.
"It was softer than expected obviously, with the quarter up 0.4 percent in GDP terms," said Nathan Janzen, senior economist at the Royal Bank of Canada. "It looks like a lot of the weakness can be attributed to softening of the oil patch. If you're the Bank of Canada, it's another reason to hold off on raising interest rates for a while."
* At 3:58 p.m. EST (2058 GMT), the Canadian dollar was trading at 1.3301 to the greenback, or 75.18 US cents, down 1.09 percent.
* The currency's strongest level of the session was 1.3130, while its weakest level was 1.3307. * Canada's economy posts 0.4 pct annualized Q4 growth.
* US crude prices were down 0.23 percent to $57.09 a barrel, while Brent crude lost 0.21 percent to $66.17 a barrel.
* Canadian government bond prices were higher across the maturity curve, with the two-year price up 2 Canadian cents to yield 1.769 percent and the benchmark 10-yearrising 2 Canadian cents to yield 1.94 percent.
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