Canadian forex review: C$ slightly stronger

By Commodity News Service Canada

Winnipeg – June 10/13 – CNS – The Canadian dollar was
trading at a slightly firmer level versus the US currency in late
North American activity on Monday. Supportive economic data
released early in the session helped to strengthen the Canadian
currency, market watchers said.

`Activity on Monday was consolidative in nature, especially
after Friday’s sharp upswing in the Canadian dollar, brokers
said.

The Canadian currency late in the afternoon was quoted at
C$1.0188 (98.15 US cents). This compares with Friday’s late
North American quote of C$1.0198,(98.06 US cents).

The Canadian dollar was bolstered by blockbuster job
creation in May reported on Friday.

On Monday, there was another solid report out from Canada’s
housing sector, with housing starts rising to 200,200 units at an
annual rate in May, bettering economists call for an increase of
178,100.

Weakness in global crude oil on Monday tempered some of the
gains seen in the Canadian currency, analysts said.

There are no significant Canadian data releases scheduled
for Tuesday.

Canadian bonds finished on a weaker footing along the yield
curve Monday with the downward motion in US Treasuriesx helping
to undermine values, market watchers said.

Canada’s two-year bond yield is at 1.163% Monday, from
1.133% Friday. The 10-year bond yielded 2.200%, from 2.149%. Bond
yields move inversely to bond prices.

Canada created 95,000 jobs in May, more than six times the
amount expected by economists, according to the labor force
survey. That data, combined with better-than-expected jobs data
south of the border, induced sharp selling of Canadian bonds
Friday.

US Treasurys came under renewed selling pressure Friday
after S&P brightened the credit outlook for the US, revising its
outlook upward for the US’s credit rating to stable from
negative.

The decision reinforced market expectations the US Federal
Reserve could start cutting back on its quantitative easing
program this year.
END