Canadian Forex Review: C$ Nears Parity

By Commodity News Service Canada

Winnipeg – May 8/13 – CNS – The Canadian dollar was trading
at a stronger level versus the US currency in late North American
activity on Wednesday. Much of the upswing in the value of the
Canadian dollar was influenced by the advances seen in outside
markets as well as in commodities, market watchers said.

Strong gains were posted in the North American equity sector
as well as in global crude oil and gold values.

The Canadian currency late in the afternoon was quoted at
C$1.0033 (99.67 US cents). This compares with Tuesday’s late
North American quote of C$1.0044 (99.56 US cents).

The Canadian dollar’s slow strengthening, and psychological
and technical resistance around parity, are expected to prevent
the currency from reaching that level in the very near term.

In Canada, housing starts fell to 175,000 annualized units
in April down from a revised print of 181,000 in the previous
month, but in line with expectations.

The data were consistent with a “soft landing” scenario for
Canada’s slowing housing sector, analysts said.

On Thursday, market participants will get some additional
information to work with in that sector when the new housing
index for March will be released.

Canadian bonds ended on a firmer footing along the yield
curve on Wednesday with the advances in US Treasurys providing
some of the momentum, market watchers said.

Canada’s two-year bond yield was at 0.977% Wednesday, from
0.980% Tuesday. The 10-year bond yielded 1.808%, from 1.823%.
Bond yields move inversely to bond prices.

Bond markets edged higher, with longer maturities
outperforming the rest of the curve,
END