Canadian forex review: C$ rises more than half a cent

By Commodity News Service Canada

WINNIPEG, July 23 – The Canadian dollar strengthened more than half a cent against its US counterpart on Tuesday, underpinned by better than expected Canadian retail sales data, analysts said.

According to Statistics Canada, retail sales rose 1.9% to C$40.4 billion in May, the largest monthly increase since March 2010. Average trade guesses called for an increase of 0.4%.

The Canadian currency was quoted at US$0.9723, or US$1=C$1.0285 at the close on Tuesday, which compares with Monday’s North American close of US$0.9667, or US$=C$1.044.

Some of the upswing in the value of the Canadian dollar was also linked to the strength seen in commodity prices, including crude oil, gold and copper.

Canadian bonds closed lower, lagging behind the US Treasury market due to the better than expected Canadian retail sales data, market watchers said.

The two-year bond yielded 1.114% late Tuesday, from 1.090% late Monday. The 10-year bond yielded 2.406%, from 2.356%. Bond yields fall as their prices rise.