By Commodity News Service Canada
WINNIPEG, July 16 – The Canadian dollar strengthened against its US counterpart on Tuesday, lifted by expectations that the US Federal Reserve will announce later this week that they’re in no hurry to ease out of stimulus programs, analysts said.
The Canadian currency was quoted at US$0.9647, or US$1=C$1.0366 at the close on Tuesday, which compares with Monday’s North American close of US$0.9602, or US$=C$1.0415.
Some of the loonie’s upward price movement was also linked to traders squaring positions ahead of the US Federal Reserve and Bank of Canada announcements on Wednesday.
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Bank of Canada governor Stephen Poloz is expected to announce that interest rates will remain unchanged in his monetary policy report on Wednesday.
Further support came from strength in commodities, including gold and copper. However, losses seen in crude oil limited the upside.
However, disappointing Canadian manufacturing data helped to limit the Canadian dollar’s upward climb. Canadian manufacturing sales increased 0.7% to C$48.6 billion in May, Statistics Canada said.
Canadian bonds closed mixed as traders looked ahead to Wednesday’s announcements from the Bank of Canada and US Federal Reserve, analysts said.
The two-year bond yielded 1.119% late Tuesday, from 1.132% late Monday. The 10-year bond yielded 2.403%, from 2.418%. Bond yields fall as their prices rise.
