Loonie flat amid better than expected U.S. growth, fiscal cliff optimism

TORONTO – The Canadian dollar was little changed Thursday amid hopes that American politicians are inching towards a deal on averting the so-called fiscal cliff that would result from the imposition of big spending cuts and tax hikes next year.

The currency slipped 0.01 of a cent to 100.81 cents US on top of a gain of about 1/3 of a US cent on Wednesday.

Traders also took in better than expected Canadian trade data and an upward revision of third-quarter U.S. economic growth.

Statistics Canada reported the country’s current account deficit increased $500 million to $18.9 billion in the third quarter. The agency said the deficit grew as exports declined at a faster pace than than imports fell.

And the U.S. economy grew at an annual rate of 2.7 per cent in the third quarter, higher than the original reading of two per cent.

Traders were reassured after House Speaker John Boehner said he was optimistic that a deal can be reached with President Barack Obama. Optimism was further bolstered after Obama that he believes that members of both parties can reach a “framework” on a debt-cutting deal before Christmas.

Later Thursday, U.S. Treasury Secretary Tim Geithner will meet separately with all four of the top congressional leaders _ House Speaker John Boehner, Minority Leader Nancy Pelosi, Senate Leader Harry Reid and Senate Minority Leader Mitch McConnell.

Commodity prices were also higher as January crude on the New York Mercantile Exchange rose $1.08 to US$87.57 a barrel.

December copper gained six cents to US$3.60 while December bullion was ahead $5.30 to US$1,724.10 an ounce.