Canadian Forex Review: C$ Eases

By Commodity News Service Canada

WINNIPEG, December 19 – The Canadian dollar eased against its US counterpart in late activity on Wednesday, as traders liquidated positions ahead of the holiday season and the New Year, analysts said.

The Canadian currency late in the afternoon was quoted at US$1.0120, or US$1=C$0.9881, which compares with Tuesday’s North American close of US$1.0145, or US$=C$0.9857.

Some traders were hedging their risk in case the ‘fiscal cliff’ in the US isn’t avoided, which also generated some of the weakness in the value of the Canadian dollar.

However, positive Canadian economic data helped to slow the decline. Canadian wholesale sales were up 0.9% to C$49.2 billion in October, following a decline of 1.5% in September, Statistics Canada reported.

Canadian bonds were mostly higher, as traders were less optimistic that US lawmakers will reach a solution for the US ‘fiscal cliff’ before January 1.

Yields for Canada’s 2-year bond were at 1.136% late Wednesday, which compares to 1.152% late Tuesday. The 10-year bond was yielding 1.844%, from 1.843%. Bond yields move inversely to bond prices.