Canadian forex review: C$ strengthens

By Commodity News Service Canada

WINNIPEG, July 31 – The Canadian dollar strengthened against US counterpart on Wednesday, as this afternoon’s US Federal Reserve announcement was positive for the currency, analysts said.

The US Federal Reserve said they’re worried about low inflation rates in the US, which may lead them waiting longer to start easing out stimulus programs.

The Canadian currency was quoted at US$0.9735, or US$1=C$1.0272 at the close on Wednesday, which compares with Tuesday’s North American close of US$0.9707, or US$=C$1.0302.

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Strength in commodity prices, including crude oil and copper, also contributed to some of the Canadian dollar’s upward movement.

Positive US gross domestic product (GDP) data and disappointing Canadian GDP figures were released Wednesday, which caused some volatile action during the earlier part of the trading session.

Canadian bonds closed higher, lifted by the US Federal Reserve announcement saying that they’re worried about low inflation rates. Analysts said that end-of-month buying was also supportive.

The two-year bond yielded 1.157% late Wednesday, from 1.181% late Tuesday. The 10-year bond yielded 2.457%, from 2.509%. Bond yields fall as their prices rise.

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