By Commodity News Service Canada
Winnipeg – March 5/13 – CNS – The Canadian dollar was
trading at a fractionally weaker level versus the US currency in
late North American activity on Tuesday. Much of the price action
in the Canadian dollar was linked to position squaring with
participants wary of pushing the currency one way or the other
ahead of Wednesday’s Bank of Canada interest rate announcement,
market watchers said.
The Canadian currency late in the afternoon was quoted at
C$1.0279 (97.28 US cents). This compares with Monday’s late North
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The Bank of Canada will announce its rate decision Wednesday
at 10 am EST. The central bank is widely expected to keep its
interest rates steady at 1.00%. But analysts will be paying close
attention to the central bank’s communique, which might give some
indication of how much of its accommodative monetary policy it
will continue, and when it might be tightened.
In the preceding Bank of Canada rate announcement in
January, the central bank said that it sees the chances for
further tightening of its monetary policy to be “less imminent.”
Some support for the Canadian currency was derived from the
upturn in global crude oil values, brokers said. The advances in
the North American equity sector also were viewed as mildly
Canadian bonds were generally lower across the yield curve
on Tuesday with investors concentrating their attention on the
rally experienced by the North American equity sector, market
watchers said.
Canada’s two-year bond yield was at 0.955% Tuesday, from
0.943% Monday. The 10-year bond yielded 1.810%, from 1.807%. Bond
yields move inversely to bond prices.
Canadian bonds followed their U.S. counterparts in negative
territory as the DJIA closed Tuesday’s session at 14253.77, ahead
of its previous record high of 14198.10, set in October 2007.
Bond traders will now shift their attention to the Bank of
Canada, which will announce its rate decision Wednesday at 10
a.m. EST.
END
