Canadian forex review: C$ strengthens

By Commodity News Service Canada

WINNIPEG, July 11 – The Canadian dollar moved more than a cent higher against its US counterpart on Thursday.

Much of the strength in the value of the Canadian dollar was linked to news from the US Federal Reserve. The government agency’s Chairman, Ben Bernanke, said that they’re not in a rush to ease out of stimulus programs because employment and inflation figures continue to be disappointing.

The Canadian currency was quoted at US$0.9629, or US$1=C$1.0385 at the close on Thursday, which compares with Wednesday’s North American close of US$0.9508, or US$=C$1.518

Strength in commodities, including gold and copper, also provided underlying support for the Canadian dollar. However, weakness in crude oil limited its upside potential.

Statistics Canada released its New Housing Price Index (NHPI) data Thursday morning, which showed the NHPI rose 0.1% in May, following an increase of 0.2% in April.

Canadian bonds rallied on Thursday, following the same action seen in the US Treasury market, analysts said. The rally in both markets was also linked to the comments made by US Federal Reserve Chairman, Ben Bernanke.

The two-year bond yielded 1.132% late Thursday, from 1.160% late Wednesday. The 10-year bond yielded 2.464%, from 2.512%. Bond yields fall as their prices rise.