Canadian Forex Review: C$ Firms further

By Commodity News Service Canada

Winnipeg – March 15/13 – CNS – The Canadian dollar was
trading at a stronger level versus the US currency in late North
American activity on Friday. Much of the upswing in the value of
the Cnadian dollar reflected the release of US economic
indicators revealing that US consumer sentiment was weakening,
market watchers said.

The Canadian currency late in the afternoon was quoted at
C$1.0188 (98.15 US cents). This compares with Thursday’s late
North American quote of C$1.0221 (97.82 US cents).
The Thomson Reuters/University of Michigan index for March showed
US consumer-sentiment at its weakest since December 2011. The
data surprised many after a recent string of stronger US
indicators, including retail sales and employment, and suggested
a possible continuation of the Federal Reserve’s easy-money
policies.

In Canadian data, the Canadian Real Estate Association said
average home prices slid 1% in February from a year ago, while
sales activity declined by a staggering 15.8%.

The industry group said sales activity in the latter half of
last year “geared down” more than expected in some regions, in
part because of the federal government’s fourth new
mortgage-tightening rule in as many years.

A separate economic indicator showed a sharp slowdown in
household debt accumulation, suggesting Canadians are heeding
policymakers’ warnings about piling on too much debt or are
becoming restrained by the new lending rules.

The ratio of household credit market debt to personal
disposable income, nonetheless, hit a new record high at 164.97%
in the fourth quarter, from 164.70% in the prior three months.

Some support for the Canadian unit also came from the
advances experienced by global crude oil during the session,
analysts said.

Canadian bond issues were higher along the yield curve on
Friday as weaker US consumer confidence sparked concerns, luring
investors out of higher-yielding assets in search of safer bets,
market watchers said.

Canada’s two-year bond yield was at 0.994% late Friday, from
1.005% late Thursday. The 10-year bond yielded 1.897%, from
1.951%. Bond yields move inversely to bond prices.
END