Canadian forex review: C$ weakens ahead of weekend

By Commodity News Service Canada

WINNIPEG, August 2 – The Canadian dollar weakened against its US counterpart on Friday, with the liquidation of positions ahead of the long weekend weighing on its value, analysts said. Canadian markets will be closed on Monday, August 5, for a Civic holiday.

The Canadian currency was quoted at US$0.9625, or US$1=C$1.0390 at the close on Friday, which compares with Thursday’s North American close of US$0.9664, or US$=C$1.0348.

The Canadian dollar rallied earlier in the week, underpinned by month-end buying. But, that buying has now dried up, leaving the Canadian dollar vulnerable to selling pressure.

Weakness in commodities, including crude oil, copper and gold, also spilled over to weigh on the loonie.

However, disappointing US employment data limited the losses, as it created speculation that the US Federal Reserve will wait longer to start easing out of stimulus measures.

There was no significant Canadian economic data released on Friday. Statistics Canada will release housing, building, international trade and unemployment data next week.

Canadian bonds moved higher, following along with the US Treasury market, which rallied in reaction to the release of disappointing US employment data, brokers said.

The two-year bond yielded 1.161% late Friday, from 1.1881% late Thursday. The 10-year bond yielded 2.494%, from 2.549%. Bond yields fall as their prices rise.