Canadian forex review: C$ softens, erasing early gains

By Commodity News Service Canada

WINNIPEG, April 8 – The Canadian dollar ended weaker against the US dollar on Wednesday, after moving sharply higher earlier in the day.

The Canadian currency’s decline was linked to a sharp drop in crude oil values, which were down more than 5.5 per cent on Wednesday, analysts said.

The Canadian dollar closed at US$0.7976 or US$1=C$1.2538 on Wednesday, which compares with Tuesday’s North American settlement of US$0.7997 or US$1=C$1.2504.

Further downward pressure came from the US Federal Reserve meeting minutes, as they showed a positive view on economic conditions in the US, brokers added.

There was no significant Canadian economic data released, though traders were looking ahead to Canadian employment data on Friday and the Bank of Canada’s policy rate announcement next week.

Canadian bonds ended mixed on Wednesday after a day of choppy activity, participants said.

The two-year bond yielded 0.506% Wednesday, from 0.502% late Tuesday. The 10-year bond yield was at 1.337%, from 1.344%. Bond yields rise as their prices fall.