Canadian forex review: C$ firms

By Commodity News Service Canada

WINNIPEG, Feb. 4 – The Canadian dollar firmed against the US dollar on Tuesday amid continued optimism that the US government may approve the Keystone XL Pipeline project, which would result in increased Canadian oil exports.

The Canadian currency was at US$0.9026 or US$1=C$1.1079 at the close on Tuesday, which compares with Monday’s North American settlement of US$0.9011 or US$=C$1.1097.

Continued short covering after the loonie fell to sharply lower levels last was supportive, as was spillover from the gains seen in other commodity-based currencies, analysts said.

Strength in crude oil prices was bullish for the Canadian dollar, while weakness in gold values put some downward pressure on the currency.

Canadian bonds closed lower Tuesday, as traders were opting out of the fixed-income market to invest in equity markets, according to industry officials.

The two-year bond yielded 0.960% late Tuesday, from 0.932% late Monday. The 10-year bond yielded 2.338%, from 2.295%. Bond yields fall as their prices rise.