Canadian forex review: C$ strengthens

By Commodity News Service Canada

WINNIPEG, September 4 – The Canadian dollar was stronger compared to its US counterpart on Wednesday, as the Bank of Canada left its interest rates unchanged, which was expected.

The Canadian currency was quoted at US$0.9531, or US$1=C$1.0492 at the close on Wednesday, which compares with Tuesday’s North American close of US$0.9497, or US$=C$1.0530.

Improved global risk sentiment, due to optimism surrounding global economic growth, helped to underpin the Canadian currency, market watchers said.

However, weakness seen in commodity prices, including crude oil, gold and copper, spilled over to limit the loonie’s upside potential.

Canadian bonds moved lower following the Bank of Canada announcement, which noted interest rates would remain unchanged, as expected.

The two-year bond yielded 1.232% late Wednesday, from 1.224% late Tuesday. The 10-year bond yielded 2.711%, from 2.683% Bond yields fall as their prices rise.