Canadian Forex/Bond Review: C$ Recovers Ahead of BoC

By Commodity News Service Canada

Winnipeg, April 16 – The Canadian dollar was stronger on Tuesday, seeing a partial recovery from Monday’s declines.

The Canadian currency late in the afternoon was quoted at US$0.9799, or US$1=C$1.0205. This compares with Monday’s North American close of US$0.9752, or US$=C$1.0254.

After Monday’s broad sell-off in most financial markets caused the Canadian dollar to drop sharply relative to its US counterpart, the currency was due for a correction on Tuesday, said analysts.

Monthly manufacturing data from Statistics Canada, showing a 2.6% increase in sales in February, beat market expectations and contributed to the firmer tone in the Canadian currency, according to analysts.

The Bank of Canada is set to make its latest interest rate announcement on Wednesday. While the Bank is generally expected to keep its key overnight rate unchanged at 1.0%, market participants will be following the accompanying statement closely for any changes in wording.

Canadian bonds were weaker on Tuesday, with the improved manufacturing data said to be behind some of the selling pressure.