Canadian forex review: C$ drops sharply again

By Commodity News Service Canada

WINNIPEG, Jan. 8 – The Canadian dollar closed a third of a cent lower on Wednesday, hitting a fresh three-year low in the process. This comes after the currency dropped more than a cent against the US dollar on Tuesday.

Positive US employment data was to blame for Wednesday’s decline, analysts said. ADP, a US payroll firm, reported the private sector jobs increased by 238,000 in the US during the month of December, beating expectations of a 200,000 job jump.

The Canadian currency closed at US$0.9256 or US$1=C$1.0804 on Wednesday, which compares with Tuesday’s North American settlement of US$0.9283 or US$=C$1.0772.

Spillover pressure from the declines seen in commodities, including crude oil, gold and copper, was also responsible for some of the Canadian dollar’s weakness.

Canadian bonds moved lower, following along with the US Treasury market, brokers said.

The two-year bond yielded 1.111% late Wednesday, from 1.110% late Tuesday. The 10-year bond yielded 2.718%, from 2.680%. Bond yields fall as their prices rise.