Canadian dollar lower, greenback higher amid better than expected economic growth

TORONTO – The Canadian dollar was lower Thursday as the American currency strengthened amid data showing stronger than expected economic growth in the second quarter. Also, commodity prices backed off as concerns about intervention in Syria’s civil war faded somewhat.

The loonie was down 0.28 of a cent to 95.19 cents US as gross domestic product grew at an annualized rate of 2.5 per cent, better than the 2.2 per cent that economists expected. The original reading was 1.7 per cent.

Canadian economic growth figures for June and the second quarter come out on Friday.

Also, jobless insurance claims dipped by 6,000 last week to 331,000.

The prospect of an immediate multinational response diminished late Wednesday after the UN Security Council’s permanent members failed to agree to a proposal to use force against Syria.

And President Barack Obama also gave the impression that he had not yet decided to back a military strike. The U.K. government also backed down on a parliamentary vote to authorize British participation in any strike against Syria until UN inspectors reveal their findings on the apparent chemical attack in the suburbs of Damascus that has been blamed on the government of President Bashar Assad. The report is expected within a week.

The prospect of intervention in the country’s civil war has rattled markets this week as it has raised fears that such a move could seriously affect a fragile global economic recovery and that fighting could spread to other areas of the Mideast.

Oil prices declined after running up about $4 in the last two sessions on supply disruption concerns. The October contract on the New York Mercantile Exchange fell $1.01 to US$109.09. Crude also felt the effect of data released Wednesday showing a sharp run-up in inventories last week.

Other commodities were also lower as gold prices also started to back off following gains earlier in the week. The December bullion contract in New York lost $6 to US$1,412.80 an ounce.

September copper slipped one cent to US$3.29 a pound.