CANADA FX DEBT-C$ falls on GDP miss; posts biggest monthly gain in nearly a year

(Adds strategist quote and details throughout; updates prices) * Canadian dollar weakens 0.3% against the greenback * Loonie advanced 2.4% for the month of October * Preliminary estimate shows GDP unchanged in September * Canadian 2-year yield rises 5.9 basis points to 1.073% By Fergal Smith TORONTO, Oct 29 (Reuters) – The Canadian dollar fell against its broadly stronger U.S. counterpart on Friday as domestic data showed that economic growth likely flatlined in September, but the loonie still notched a gain for October, snapping a four-month losing streak. The loonie was trading 0.3% lower at 1.2380 to the greenback, or 80.78 U.S. cents, after trading in a range of 1.2329 to 1.2408. “It is basically a combination of weaker Canadian data and a broad-based rally in the USD to end the month,” said George Davis, chief technical strategist at RBC Capital Markets. A preliminary estimate showed that GDP was unchanged in September after rising 0.4% in August. The August gain was less than the 0.7% increase economists had expected. Third-quarter GDP was estimated to have increased at an annualized rate of 1.9%, much less than the Bank of Canada forecast at a policy announcement on Wednesday. Still, money markets expect the central bank to begin raising interest rates in January and to hike 125 basis points in total next year as concern grows that inflation will be more persistent than previously thought. That is much more tightening than is expected from the U.S. Federal Reserve. For the month, the loonie was up 2.4%, its first monthly gain since May and its biggest since last November. It was helped by higher prices for oil, one of Canada’s major exports. U.S. crude oil futures on Friday settled 0.9% higher at $83.57 a barrel on expectations that OPEC will keep supply tight. Meanwhile, the U.S. dollar index rallied after the Fed’s preferred inflation measure showed prices climbing at a fast pace. The Canadian 2-year rose 5.9 basis points to 1.073%, while the 10-year was up 1.7 basis point at 1.690%. On Thursday, it touched its highest intraday level since December 2019 at 1.729%. (Reporting by Fergal Smith; Editing by Andrea Ricci)