Canadian Forex/Bond Review: C$ Strengthens

By Commodity News Service Canada

Winnipeg, Dec. 17 – The Canadian dollar was stronger on Monday, supported activity in the outside markets and favourable investment data.

The Canadian currency late in the afternoon was quoted at US$1.0166, or US$1=C$0.9837. This compares with Friday’s North American close of US$1.0137, or US$1=C$0.9865.

A firmer tone in the outside equity markets, along with advances in crude oil, provided some support for the Canadian dollar, according to analysts. Solid foreign investment in Canadian securities also accounted for some of the strength in the currency.

Foreign investment in Canadian securities came in at C$13.26 billion in October, according to Statistics Canada data released Monday. While that was down slightly from the upwardly revised C$14.10 billion the previous month, the investment overall was taken as a sign that Canada’s economy was relatively healthy.

Canadian bonds were weaker on Monday, as expectations that the US may be able to find a resolution to its ‘fiscal cliff’ situation had investors backing out of bonds and into the riskier equity markets, according to participants.