TORONTO - The Canadian dollar edged higher Tuesday following the latest GDP figures that signalled that Canada's economy may be doing better than many believed.

The loonie gained 0.05 a cent to 85.98 cents US.

Statistics Canada reported gross domestic product grew by 0.3 per cent in October, beating the consensus expectations of economists, who had predicted growth of 0.1 per cent for the month. The economy had grown by 0.4 per cent in September.

The federal agency attributed the growth to oil and gas extraction and mining.

Meanwhile, the United States also showed strong signs of economic growth. The U.S. Commerce Department, in a revised report, said the economy expanded by five per cent in the third quarter, the fastest in 11 years, helped by consumer spending. It had previously reported growth of 3.9 per cent for the quarter. Economists had anticipated a revision to 4.3 per cent.

The department also reported that U.S. factory orders for November slumped, largely due to falling demand in the military and defence sectors. It said orders for durable goods dropped 0.7 per cent last month, the third decline in the past four months. Much of the decrease came from a steep 8.1 per cent plunge in demand for defence-related items.

Crude prices seemed to enjoy a small bounce back after they headed back down to near the US$55 a barrel level on Monday .The downward movement in oil largely came after Saudi Arabia reiterated over the weekend that it's set on keeping production at current levels, even in light of falling prices.

Saudi Petroleum Minister Ali Naimi also told the energy summit in Abu Dhabi that he was confident the depressed crude market will recover on an improving economy.

"The best thing for everybody is to let the most efficient produce,'' he said at the Arab Energy Conference, a gathering held every four years.

Oil hit a high of US$107 a barrel in June, but has since plunged nearly 50 per cent due to falling demand and a production glut.

Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, has refused to make cutbacks to support prices. OPEC supplies about 40 per cent of the world market.

On Tuesday, the January contract was up $1.86 to US$57.12 a barrel.

Other commodities were lower, as the February gold bullion contract fell $1.80 at US$1,178 an ounce, while March copper dipped a penny to US$2.87 a pound.

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News from © The Canadian Press, 2014