Canadian forex review: C$ falls towards 80 cents US

By Commodity News Service Canada

WINNIPEG, June 30 – The Canadian dollar fell sharply against the US dollar Tuesday, testing the 80 cents US mark after disappointing Canadian gross domestic product data was released.

Statistics Canada said gross domestic product fell by 0.1 per cent in April, missing expectations of a 0.1 per cent increase.

The Canadian dollar closed at US$0.8006 or US$1=C$1.2490 on Tuesday, which compares with Monday’s North American settlement of US$0.8070 or US$1=C$1.2392.

Traders also continued to shed riskier assets, including the Canadian dollar, in light of economic turmoil in Greece. The country’s government closed its banks until July 6 to buy time to make a decision about whether or not to accept international financial aid.

Profit taking ahead of the market’s closure for the Canada Day holiday on Wednesday was also bearish, according to analysts.

However, commodities and crude oil values moved higher on Tuesday, which helped to limit the downside in the Canadian currency.

Canadian bonds closed higher on Tuesday, reacting to the disappointing Canadian GDP data after a shortened day ahead of Canada Day. The Canadian market outperformed US Treasurys, according to brokers.

The two-year bond yielded 0.487% Tuesday, from 0.562% Monday. The 10-year bond yield was at 1.690%, from 1.747%. Bond yields rise as their prices fall.