Canadian forex review: C$ firms

By Commodity News Service Canada

WINNIPEG, Oct. 22 – The Canadian dollar firmed against the US currency on Tuesday, underpinned by disappointing US employment data, which could result in the US Federal Reserve holding off on easing out of stimulus programs.

According to the US Department of Labour, the economy created 148,000 jobs in September, which fell below expectations that there would be an increase of 180,000 jobs.

The Canadian currency was quoted at US$0.9719 or US$1=C$1.0289 at the close on Tuesday, which compares with Monday’s North American close of US$0.9708 or US$=C$1.0301.

Strong gains seen in gold prices helped to further underpin the Canadian currency. Though, weakness in crude oil limited its upside potential.

Disappointing Canadian retail sales data was also bearish. Statistics Canada reported that retail sales increased by 0.2% in August, which compares with the expected 0.3% rise.

Canadian bonds were stronger, following along with the US Treasury market Tuesday. Both markets were underpinned by the disappointing US employment data, brokers said.

The two-year bond yielded 1.171% late Tuesday, from 1.199% late Monday. The 10-year bond yielded 2.483%, from 2.550%. Bond yields fall as their prices rise.