Canadian forex review: C$ closes near key support levels

By Commodity News Service Canada

WINNIPEG, July 17 – The Canadian dollar moved lower on Friday, hitting nearby support levels in the process.

The Canadian dollar closed at US$0.7700 or US$1=C$1.2987 on Friday, which compares with Thursday’s North American settlement of US$0.7710 or US$1=C$1.2970.

The Bank of Canada’s more dovish stance on economic growth in Canada, and their decision to make another interest rate cut earlier this week, continued to undermine the loonie.

Positive US inflation data was also bearish, as it reinforced ideas that the US Federal Reserve will raise interest rates later this year.

However, Canadian inflation data released Friday was also positive, which limited the downside. The core inflation rate rose 2.3 per cent in June, above expectations of a 2.2 per cent jump.

Canadian bonds were mostly higher as traders were flocking to safe haven assets ahead of the weekend, market watchers said.

The two-year bond yielded 0.423% on Friday, from 0.415% on Thursday. The ten-year bond yield was at 1.560%, from 1.580%. Bond yields fall as their prices rise.