Canadian forex review: C$ eases

By Commodity News Service Canada

WINNIPEG, Feb. 20 – The Canadian dollar eased against the US dollar on Thursday, with disappointing Chinese economic data behind some of the softness, analysts said.

HSBC’s monthly purchasing managers’ index for China fell to 48.3 in February, from 49.5 in January, preliminary data showed. Anything below 50 shows contraction.

The Canadian dollar closed at US$0.9010 or US$1=C$1.1099 on Thursday, which compares with Wednesday’s North American settlement of US$0.9024 or US$=C$1.1082.

Trading activity was on the lighter side Thursday, as many market participants were distracted by Canadian women’s curling and hockey Olympic gold medal matches, analysts said.

Activity is expected to return to normal levels on Friday, with some volatility anticipated after Statistics Canada releases updated inflation data.

Canadian bonds were little changed as traders moved to the sidelines ahead of Canadian inflation data, which will be released Friday morning, brokers said.

The two-year bond yielded 1.003% late Thursday, from 1.001% late Wednesday. The 10-year bond yielded 2.439%, from 2.439%. Bond yields fall as their prices rise.