C$ weakens slightly ahead of Canada GDP

TORONTO: The Canadian dollar weakened slightly against its US counterpart on Thursday just ahead of Canadian gross domestic product data and as traders eye a key jobs report out of the United States.

At 8:02 a.m. (1302 GMT) the Canadian dollar was trading at C$1.0020 to the greenback, or 99.80 US cents, compared with C$1.0015, or 99.85 US cents, at Wednesday's North American close.

November GDP data for Canada is due out at 8:30 am, with the consensus in a Reuters poll pointing to annualized growth of 0.2 percent.

A reading above 0.4 percent could push the currency to C$0.9991 to the greenback while a flat or negative number could weaken the Canadian dollar to around C$1.0060, according to Jeremy Stretch, head of foreign exchange strategy at CIBC World Markets.

After that, attention will quickly turn to US employment data due out on Friday.

"We're left beholden to labor market data in particular, and that's why the number tomorrow is going to be so elevated in terms of its potential market reaction," Stretch said. "That's going to be the driving force for sentiment vis a vis North America in general, and to an extent the global backdrop as well."

The US Federal Reserve kept its bond-buying plan in place at the end of a two-day meeting on Wednesday, saying economic growth had stalled. Gross domestic product data released earlier in the day showed that the US economy, Canada's main export market, shrank in the fourth quarter of 2012.

The price of a two-year Canadian bond was up 1 Canadian cent to yield 1.161 percent, while the benchmark 10-year bond rose 12 Canadian cents to yield 1.983 percent.