Canadian forex review: C$ strengthens

By Commodity News Service Canada

WINNIPEG, August 27 – The Canadian dollar was stronger compared to its US counterpart on Tuesday, as the strong advances seen in crude oil and gold spilled over to support the currency, analysts said.

Crude oil, which is one of Canada’s biggest exports, rose to its highest value since July, with concerns that problems in Syria will make it harder to move Middle Eastern supplies. There was allegedly a chemical weapon attack in the country last week.

The Canadian currency was quoted at US$0.9547, or US$1=C$1.0474 at the close on Tuesday, which compares with Monday’s North American close of US$0.9521, or US$=C$1.0503.

An announcement from the European Central Bank, which said low interest rates will stay in place in the region for as long as necessary, was also supportive.

The Canadian dollar’s upside was limited by a lack of risk sentiment, which was spurred on by concerns about unrest in Syria.

There was no significant Canadian economic data to report on Tuesday. Traders were looking ahead to Friday, when Statistics Canada is set to release Canadian growth data for the second quarter of 2013.

Canadian bonds moved higher on Tuesday, lifted by concerns about political tension in Syria and uncertainty about how the situation will be resolved, traders said.

The two-year bond yielded 1.166% late Tuesday, from 1.187% late Monday. The 10-year bond yielded 2.578%, from 2.650% Bond yields fall as their prices rise.