Canadian Forex Review: C$ Firms

By Commodity News Service Canada

WINNIPEG, December 20 – The Canadian dollar firmed against its US counterpart in late activity on Thursday, following the upward action seen in outside equity markets, analysts said.

The Canadian currency late in the afternoon Thursday was quoted at US$1.0129, or US$1=C$0.9873, which compares with Wednesday’s North American close of US$1.0120, or US$=C$0.9881.

Better than expected Canadian retail sales data helped to underpin the Canadian currency. Retail sales in Canada were up 0.7%, to C$39.4 in October, according to Statistics Canada.

Positive gross domestic product (GDP) data from the US was also supportive. Third quarter GDP in the US expended at an annual rate of 3.1%, beating pre-report expectations of a 2.8% expansion.

However, declines seen in commodity prices and liquidation ahead of the holiday season limited the Canadian dollar’s upside potential.

Traders were looking ahead to Friday, when Statistics Canada will release its final two reports of the year, inflation and gross domestic product data.

Canadian bonds were mixed on Thursday, as traders were squaring positions ahead of the New Year.

Yields for Canada’s 2-year bond were at 1.136% late Thursday, which compares to 1.141% late Wednesday. The 10-year bond was yielding 1.849%, from 1.845%. Bond yields move inversely to bond prices.