Canadian forex review: C$ firms

By Commodity News Service Canada

WINNIPEG, Dec. 20 – The Canadian dollar closed firmer against its US counterpart on Friday, as investors were taking profits on their short positions ahead of the holiday season, analysts said.

The Canadian currency closed at US$0.9391 or US$1=C$1.0648 on Friday, which compares with Thursday’s North American settlement of US$0.9376 or US$=C$1.0666.

Spillover support for the Canadian dollar also came from the advances seen in commodities, including crude oil, gold and copper prices.

However, disappointing Canadian inflation data limited the upside. Statistics Canada reported that the consumer price index (CPI) was up 0.9% in November, falling short of expectations of a 1.0% rise. The CPI was up 1.1%, year over year, in November, which was below the Bank of Canada’s inflation target of 2%.

Canadian bonds were higher on Friday, with some of the buying linked to disappointing Canadian inflation data and positive US growth numbers, brokers said.

The two-year bond yielded 1.102% late Friday, from 1.137% late Thursday. The 10-year bond yielded 2.666%, from 2.705%. Bond yields fall as their prices rise.