Canadian forex review: C$ firms

By Commodity News Service Canada

WINNIPEG, Sept. 27 – The Canadian dollar firmed against its US counterpart on Friday, supported by spillover support from the strong gains seen in gold prices, analysts said.

The Canadian currency was quoted at US$0.9706 or US$1=C$1.0303 at the close on Friday, which compares with Thursday’s North American close of US$0.9696 or US$=C$1.0313.

However, the upside was limited by weakness in crude oil values.

Traders were also being cautious of pushing the currency too far one way or the other due to uncertainty surrounding the US budget debate.

Some of the activity was linked to positioning ahead of Monday’s Canadian gross domestic product data, which is expected to show a 0.5% increase in July.

Canadian bonds were mostly higher, as traders were more interested in buying safe-haven assets, including government bonds, due to uncertainty about the US fiscal situation, brokers said.

The two-year bond yielded 1.202% late Friday, from 1.221% late Thursday. The 10-year bond yielded 2.555%, from 2.572%. Bond yields fall as their prices rise.