The Canadian dollar turned higher late morning Friday amid data showing the economy continued to register respectable growth during November.

The loonie was ahead 0.22 of a cent to 89.78 cents US as Statistics Canada reported that gross domestic product grew by 0.2 per cent, which was in line with expectations. That was down slightly from a 0.3 per cent gain in October.

But stocks dropped, with concern over emerging currency turmoil and Europe's low inflation returning to haunt investors. The TSX/S&P index was off earlier lows by the end of the day but still down 40.34 points to 13,694.94.

New York's Dow industrial index dropped  149.76 points to 15,698.85, the Nasdaq slipped 19.25 points to 4,103.88 and the S&P 500 index lost 11.6 points to 1,782.59.

"The slowing in November GDP was not unexpected after very strong increases in October and September of 0.3 per cent," observed RBC Economics Assistant Chief Economist Paul Ferley.

"There is the risk of a more pronounced slowing in December for which inclement weather in the final two weekends before Christmas may even result in activity declining marginally in the month."

The U.S. dollar had been higher earlier in the morning with traders in a risk-averse mood after data raised worries about the eurozone slipping into deflation.

Eurostat, the EU's statistics office, reported that inflation in the eurozone fell to 0.7 per cent in the year to January from 0.8 per cent the previous month.

There are concerns that the eurozone could slip into a situation where prices are actually falling. Such a development can hurt an economy as consumers delay purchases and businesses postpone investment.

The deflation concerns added to emerging market worries that have buffetted markets this past week.

Countries including Turkey, South Africa, India and Russia have seen their currencies slide sharply over the past week. Traders worry that growth will slow and money will flow out of their economies as the U.S. Federal Reserve tightens its monetary policy.

Other economic data released Friday showed that U.S. consumer spending rose 0.4 per cent in December, compared with November when spending had increased an even stronger 0.6 per cent. That was the best gain in five months.

For all of 2013, income growth was 2.8 per cent, the weakest performance since 2009.