Canadian forex review: C$ higher, recovering

By Commodity News Service Canada

WINNIPEG, Jan. 20 – The Canadian dollar closed higher amid quiet activity on Monday, as the US markets were all closed to observe Martin Luther King Jr. Day. The Canadian currency’s strength was linked to ideas that recent losses were overdone, analysts said.

The Canadian currency closed at US$0.9132 or US$1=C$1.0951 on Monday, which compares with Friday’s North American settlement of US$0.9111 or US$=C$1.0976.

Strength in crude oil and gold prices also underpinned the loonie, as did position squaring ahead of the Bank of Canada’s policy rate announcement later in the week.

Canadian bonds closed slightly higher amid quiet trade due to the US long weekend. The evening of positions ahead of the Bank of Canada’s policy report on Wednesday was supportive, brokers said.

The two-year bond yielded 1.019% late Monday, from 1.023% late Friday. The 10-year bond yielded 2.489%, from 2.505%. Bond yields fall as their prices rise.