Canadian forex review: C$ closes below 90 cents US

By Commodity News Service Canada

WINNIPEG, Feb. 26 – The Canadian dollar closed below the 90 cents US mark on Wednesday, undermined by expectations that Canada’s trade deficit with the world widened in the fourth quarter of 2013, analysts said. Statistics Canada will release trade deficit figures on Thursday.

The Canadian dollar closed at US$0.8986 or US$1=C$1.1128 on Wednesday, which compares with Tuesday’s North American settlement of US$0.9020 or US$=C$1.1086.

Positive US home buying data was also bearish the value of the Canadian dollar. Surprisingly, sales of new US homes jumped 9.6 per cent, to 468,000 in January, the US Commerce Department said.

Losses seen in gold and copper prices also weighed on the Canadian dollar, though strength in crude oil was supportive.

Traders were looking ahead to Thursday’s US Federal Reserve remarks, as well as Canadian GDP figures on Friday.

Canadian bonds were higher on Wednesday, following the gains seen in the US Treasury market, industry officials said.

The two-year bond yielded 1.006% late Wednesday, from 1.023% late Tuesday. The 10-year bond yielded 2.445%, from 2.487%. Bond yields fall as their prices rise.