Canadian forex review: C$ ends slightly higher

By Commodity News Service Canada

WINNIPEG, April 29 – The Canadian dollar ended slightly higher, finding support from disappointing US economic data released early in the day, analysts said.

The US Commerce Department said the country’s gross domestic product was up 0.2 per cent on a seasonally adjusted basis during the first quarter of 2015, while pre-report expectations called for a growth of 1.0 per cent.

The Canadian dollar closed at US$0.8317 or US$1=C$1.2023 on Wednesday, which compares with Tuesday’s North American settlement of US$0.8313 or US$1=C$1.2030.

Signs that the Canadian economy is improving were also underpinning the Canadian currency, as was positive domestic industrial industry data.

But, the loonie was well off its highs of the day, erasing some of its gains after the US Federal Reserve’s policy announcement Wednesday afternoon.

The US Federal Reserve said an interest rate hike is still possible in the coming months, even though economic growth was slower than expected during the first quarter.

Weakness in crude oil and gold were also weighing on the Canadian currency.

Canadian bonds ended weaker on Wednesday, but moved off the lows of the day following the US Federal Reserve announcement, brokers said.

The two-year bond yielded 0.679% Wednesday, from late 0.675% Tuesday. The 10-year bond yield was at 1.588%, from 1.556%. Bond yields fall as their prices rise.