Canadian forex review: C$ weakens

By Commodity News Service Canada

WINNIPEG, Oct. 2 – The Canadian dollar was weaker compared to the US dollar on Wednesday, with traders continuing to avoid riskier assets due to concerns about the US government shutdown, analysts said.

The Canadian currency was quoted at US$0.9679 or US$1=C$1.0332 at the close on Wednesday, which compares with Tuesday’s North American close of US$0.9685 or US$=C$1.0325.

Continued worries about slow economic growth in Canada, following Tuesday’s Bank of Canada announcement which lowered growth expectations for the last half of 2013, added to the bearish tone.

However, spillover support from the gains seen in commodities, including crude oil and gold, helped to limit the loonie’s downside.

Canadian bonds were slightly higher as traders were being cautious due to concerns about the US government shut down, brokers said.

The two-year bond yielded 1.185% late Wednesday, from 1.199% late Tuesday. The 10-year bond yielded 2.547%, from 2.562%. Bond yields fall as their prices rise.