Canadian forex review: C$ closes higher

By Commodity News Service Canada

WINNIPEG, Feb. 3 – The Canadian dollar finished higher against the US dollar on Monday. Optimism that the US will approve the Keystone XL pipeline project helped to lift the Canadian currency.

The approval would mean an increase in Canadian oil exports to the US, which would help to stimulate the Canadian economy, according to analysts.

The Canadian currency closed at US$0.9011 or US$1=C$1.1097 on Monday, which compares with Friday’s North American settlement of US$0.8978 or US$=C$1.1138.

A broad sell-off seen against the US dollar also helped to support to Canadian dollar, as did strength seen in gold prices, brokers said.

However, weakness in crude oil values was bearish, as were concerns about economic conditions in some emerging countries, as well as China.

Canadian bonds closed higher, following the upward movement seen in the US Treasury market after the release of weaker than expected US manufacturing data, traders said.

The two-year bond yielded 0.939% late Monday, from 0.952% late Friday. The 10-year bond yielded 2.308%, from 2.339%. Bond yields fall as their prices rise.