Canadian forex review: C$ eases

By Commodity News Service Canada

WINNIPEG, Jan. 2 – The Canadian dollar closed lower against the US dollar on Thursday amid volatile trade, as the Canadian currency was trading higher earlier in the trading session. Choppy trade was seen due to light volumes, as the market is still in holiday mode, brokers noted.

Early gains were linked to strength seen in gold prices, as well as positive European economic data. Markit said the euro zone’s purchasing managers’ index rose to 52.7 in December, from 51.6 in November.

But, a sharp drop in crude oil prices spilled over to weigh on the value of the Canadian dollar later in the day, causing it to move lower, analysts said.

The Canadian currency closed at US$0.9369 or US$1=C$1.0673 on Thursday, which compares with Tuesday’s North American settlement of US$0.9402 or US$=C$1.0636. Canadian markets were closed on Wednesday for New Year’s Day.

Canadian bonds ended higher, following the advances seen in the US Treasury market, industry officials said.

The two-year bond yielded 1.127% late Thursday, from 1.138% late Tuesday. The 10-year bond yielded 2.740%, from 2.779%. Bond yields fall as their prices rise.