Canadian forex review: C$ eases slightly

By Commodity News Service Canada

WINNIPEG, July 12 – The Canadian dollar eased slightly against its US counterpart on Friday, as Thursday’s rally was seen as overdone and in need of a downward correction, analysts said.

Much of the strength in the currency on Thursday was linked to the news that the US Federal Reserve isn’t in a rush to ease out of monetary stimulus programs.

The Canadian currency was quoted at US$0.9619, or US$1=C$1.0396 at the close on Friday, which compares with Thursday’s North American close of US$0.9629, or US$=C$1.0385.

Weakness in copper values put some downward pressure on the Canadian dollar. However, firmness in gold and crude oil limited the downside.

There was no significant Canadian economic data or news moving the Canadian dollar on Friday. Traders were looking ahead to next week’s interest rate announcement from the Bank of Canada. The central bank is expected to leave interest rates unchanged, but maintain a hawkish stance.

Canadian bonds closed mixed on Friday, following the same action seen in the US Treasury market, analysts said.

The two-year bond yielded 1.138% late Friday, from 1.133% late Thursday. The 10-year bond yielded 2.432%, from 2.443%. Bond yields fall as their prices rise.