Canadian forex review: C$ strengthens

By Commodity News Service Canada

WINNIPEG, Dec. 30 – The Canadian dollar closed stronger against the US dollar on Monday, recovering from the sharp drop seen on Friday.

The Canadian currency closed at US$0.9398 or US$1=C$1.0640 on Monday, which compares with Friday’s North American settlement of US$0.9342 or US$=C$1.0704.

A sell-off in the US dollar against commodity-based currencies, due to a drop in US 10-year bond yields, was responsible for some of the loonie’s strength, analysts said.

The loonie’s upside was, however, limited by spillover pressure from the sharp declines seen in crude oil and gold prices.

Canadian bonds ended higher, following the gains in the US Treasury market after the release of lackluster US economic data, traders noted.

The two-year bond yielded 1.131% late Monday, from 1.153% late Friday. The 10-year bond yielded 2.739%, from 2.785%. Bond yields fall as their prices rise.