* Canadian dollar ends up at 94.73 U.S. cents
* Canada exits recession but growth below expectations
* Bonds mildly stronger after disappointing headline GDP
By Ka Yan Ng
TORONTO, Nov 30 (Reuters) - The Canadian dollar finished higher versus the U.S. currency on Monday after numbers showed Canada officially exited recession and as risk appetite perked up as Dubai's debt woes started to look less worrisome.
The currency eased from early highs after gross domestic product data for the third quarter came in below expectations. Statistics Canada reported annualized real growth in gross domestic product for the quarter of 0.4 percent, short of the market forecast for 0.7 percent growth. [ID:nN30349047]
But as the session wore on, Canada's currency picked up steam alongside firming equity markets and a higher price of oil, two key barometers for the currency.
Oil prices rose more than $1 on Monday as U.S. dollar weakness outweighed concerns over debt-laden Dubai and its impact on the global economy. [O/R]
"It's a matter of some risk aversion moving to the background," said Camilla Sutton, currency strategist at Scotia Capital.
"All in all, (the GDP figures) were disappointing but the market was able to brush them off."
The Canadian dollar finished at C$1.0556 to the U.S. dollar, or 94.73 U.S. cents, up from C$1.0615 to the U.S. dollar, or 94.21 U.S. cents, at Friday's close.
Last week, the Canadian dollar fell to its lowest level in nearly three weeks, as risk-aversion jumped on concern about the once-booming Gulf region's financial health.
BONDS INCH HIGHER
Canadian bonds edged up across the curve as the headline figure on economic growth was lower than expected, but firmer equity markets limited gains.
The economy was still 3.2 percent smaller than a year earlier, and the data was unlikely to persuade the central bank to break its conditional pledge to keep the overnight interest rate at a record low 0.25 percent at least until mid-2010.
"Realistically, it's such a rock-solid commitment on rates through to June of next year that today's data doesn't have much meaningful influence," said Mark Chandler, fixed-income strategist, RBC Capital Markets. "There's very little you could piece into this that will say what will the economy look like in the middle part of next year when they are ready to raise rates."
The September reading also provided a relatively robust hand-off into the fourth quarter by expanding 0.4 percent on a monthly basis from August.
Now with Canada's recession declared finished, market players turn to this Friday's Canadian and U.S. jobs reports for November to measure the strength of the recovery.
The Canadian report is expected to show the economy added
15,000 jobs after shedding 43,200 in October with an
unemployment rate of 8.7 percent, compared with October's 8.6
percent.
The two-year Canadian government bond