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Canadian dollar falls after lower than expected GDP data weighs heavy

TORONTO - The Canadian dollar weakened Monday after the latest GDP figures showed that economic growth is moving at a sluggish pace.

The loonie dropped 0.08 of a cent to 93.72 cents US.

Statistics Canada said the economy grew by 0.1 per cent in April — the same pace as in March — on lower oil and gas production. The figures failed to meet economists' expectations of a gain of 0.2 per cent, according to Thomson Reuters.

Traders have been watching for signs that the economy has moved on from the long, severe winter, which dragged consumer spending in the first quarter.

Commodity prices were mixed with August crude losing 37 cents to US$105.37 a barrel. Crude prices have declined recently in the wake of the weaker than expected U.S. consumer data and expectations that the insurgency in Iraq won't spread to that country's oil-producing south.

September copper was up 3.55 cents at US$3.55 a pound, while August gold bullion lifted $2 to US$1,322 an ounce.

The loonie has had a positive month, up about 1 1/2 cents to a six-month high as gold and oil prices rose amid geopolitical concerns in Iraq and tensions continued in Ukraine and Russia.

The loonie had also found support from stronger than expected inflation data, which raised expectations that the Bank of Canada might raise interest rates sooner than thought.

The Canadian Press

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