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Canada’s economy grew by 0.4% in December 2011.

Early expectations stood on a rise of 0.3%. This is the last GDP read for 2011. 2011 ended in an annual gain of 1.8%.

USD/CAD managed to break under the 0.99 line earlier in the week, and attempts to return back above this line failed. The 0.930 line provided support so far.

The reaction to the better-than-expected figure is quite mild. The pair is shaking around 0.9880 but going anywhere fast.

In November, the Canadian economy squeezed by 0.1% according to the first read.

The Canadian dollar enjoyed the rising price of oil, although it’s important to remember that this is a double edged sword: higher oil prices also weigh on the US economy.  The Canadian economy is dependent on demand from the US.

Next week, Canada and the US will publish their trade balance figures, and more importantly, their employment figures.

For more on the loonie, see the Canadian dollar forecast.