By Commodity News Service Canada
WINNIPEG, August 20 – The Canadian dollar closed weaker compared to its US counterpart on Tuesday, undermined by expectations that the US Federal Reserve will start backing out of stimulus programs soon, analysts said.
The Canadian currency was quoted at US$0.9626, or US$1=C$1.0389 at the close on Tuesday, which compares with Monday’s North American close of US$0.9669, or US$=C$1.0342.
Disappointing Canadian wholesale sales data further undermined the loonie. Statistics Canada reported wholesale sales decreased 2.8% to C$48.8 billion in June.
Spillover pressure from the declines seen in crude oil values, one of Canada’s biggest exports, added to the bearish tone.
Canadian bonds moved higher amid continued ideas that the US Federal Reserve will back out of stimulus programs sooner rather than later, brokers noted.
The two-year bond yielded 1.193% late Tuesday, from 1.222% late Monday. The 10-year bond yielded 2.685%, from 2.743%. Bond yields fall as their prices rise.
