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The Candaian GDP growth in Q4 showed more than expected performance and the loonie jumped to a nearly 3-month high against the euro.

Latelety EUR/CAD seems to be weakened, as the Canadian dollar showed off nice skills on the dance battle between G10 currencies on Tuesday.

The Canadian dollar jumped with 1.01% to C$1.4572 against the euro, making the highest level since December 8.

The main boost for the currency came from the quicker-than-expected growth pace in the fourth quarter (Q4). The GDP advanced 0.8% in Q4 on an annualized basis, Statistics Canada said on Tuesday. Market consensus estimated to see a flat expansion of 0.1%.

"All of the inputs came out better than expectations in Q4," Jack Spitz, managing director of foreign exchange at National Bank Financial, told WBP Online. "EUR/CAD trending lower for the past few days, there is some technical support at C$1.45 and even better at C$1.40," Spitz added.

The resource-linked Canadian dollar also showed a break from the direction of oil prices. If this continues, the higher loonie could be a concern for the Bank of Canada (BoC), which is counting on currency weakness to help with domestic export recovery.

"The strength of CAD comes amidst flat trading in crude oil. For the moment there is a disconnection between WTI and CAD dollar. If the CAD strength [persists] amid continued WTI weakness then we can expect to some guidance from the BoC [during its rate announcement on March 9]," Spitz added.

WTI futures fell into red territory, edging down 0.12% to $33.86 per barrel, after reporting early morning gains. Meanwhile, Brent contracts also dropped 0.60% to $36.42 per barrel.

From the European macro perspective, the euro zone’s jobless rate was at a new multi-year low in January, booking 10.3% in January. Economic analysts had expected the rate to remain at 10.4%.

On the other hand, the manufacturing sector in the euro zone roseat the slowest pace in twelve months in February, with the final PurchasingManagers' Index (PMI) dipping to 51.2, down from 52.3 seen in January.

So the Canadian dollar is not dancing to a `Loonie' Tune.