Canadian forex review: C$ sharply weaker

By Commodity News Service Canada

WINNIPEG, Oct. 8 – The Canadian dollar was sharply weaker on Tuesday, losing more than half a cent against its US counterpart.

Some of the weakness was linked to news that Canada’s trade deficit widened in August, analysts said. Statistics Canada reported that Canada’s trade deficit with the world was $1.3 billion in August, from $1.2 billion in July.

The Canadian currency was quoted at US$0.9645 or US$1=C$1.0368 at the close on Tuesday, which compares with Monday’s North American close of US$0.9696 or US$=C$1.0313.

Traders were also shedding riskier assets, including the loonie, due to continued worries about the eventual results of the prolonged US government shutdown, which is now in its second week.

Spillover pressure from the losses seen in gold prices was bearish as well.

Canadian bonds were lower on Tuesday, following the losses seen in the US Treasury market.

The two-year bond yielded 1.189% late Tuesday, from 1.189% late Monday. The 10-year bond yielded 2.572%, from 2.569%. Bond yields fall as their prices rise.