Canadian forex review: C$ weakens with crude oil

By Commodity News Service Canada

WINNIPEG, May 19 – The Canadian dollar closed weaker relative to the US dollar Tuesday, following the losses seen in crude oil values, analysts said.

The Canadian dollar closed at US$0.8175 or US$1=C$1.2232 on Tuesday, which compares with Friday’s North American settlement of US$0.8318 or US$1=C$1.2022. Canadian markets were closed for Victoria Day on Monday.

General strength in the US dollar index and a move away from riskier assets, including the Canadian currency, were also bearish.

Though, some positive remarks from a Bank of Canada official limited the downside. The bank’s governor Stephen Poloz said the economy is moving in the right direction, and still believes a recovery is on its way later this year.

Canadian bonds were sharply lower Tuesday, catching up with the losses seen in the US Treasury market Monday, when Canadian markets were closed for Victoria Day, traders said.

The two-year bond yielded 0.696% Tuesday, from 0.646% late Friday. The 10-year bond yield was at 1.828%, from 1.715%. Bond yields fall as their prices rise.