The 2012 lucky loonie is pictured in Calgary July 19, 2012. THE CANADIAN PRESS/Jeff McIntosh
July 27, 2012 - 8:48 AM
TORONTO - The Canadian dollar advanced Friday amid data showing U.S. economic growth for the second quarter came in just about where economists expected.
The loonie gained 0.24 of a cent to 99.29 cents US as the U.S. Commerce Department reported that the economy grew at an annual rate of just 1.5 per cent from April through June, which was the slowest growth in a year.
It also says the economy grew a little better than previously thought in the January-March quarter. It raised its estimate to a two per cent rate, up from 1.9 per cent.
The loonie and other riskier assets such as commodities continued to find lift after the European Central Bank president pledged Thursday to do whatever it takes to save the euro currency union.
ECB President Mario Draghi suggested that the central bank could intervene in markets to lower the borrowing rates of financially weak countries like Spain.
Markets have been depressed in recent weeks as the focus of the European government debt crisis moved to Spain. Traders skeptical over the government's ability to manage high debt levels have driven up bond yields past the seven per cent level, which is considered unsustainable in the long run.
Draghi suggested that the ECB considers it part of its job to keep government borrowing rates at normal levels. It could do so by buying government bonds, which has the effect of lowering their yield, or interest rate.
Spain's 10-year yield and Italy 10-year yields are lower despite the Bundesbank comments, down 12 basis points to 6.80 per cent.
Commodity prices advanced with the September crude contract on the New York Mercantile Exchange ahead 39 cents to US$89.78 a barrel.
September copper ran ahead four cents to US$3.43 a pound while August gold gained $5.30 to US$1,620.40 an ounce.
News from © The Canadian Press, 2012