By Commodity News Service Canada
WINNIPEG, August 22 – The Canadian dollar closed sharply lower compared to its US counterpart on Thursday for the second consecutive day.
The Canadian currency was quoted at US$0.9509, or US$1=C$1.0516 at the close on Thursday, which compares with Wednesday’s North American close of US$0.9548, or US$=C$1.0473.
Some of the selling of the Canadian dollar was linked to disappointing Canadian retail sales data, analysts said. According to Statistics Canada, retail sales dropped 0.6% to C$40.1 billion in June, while traders expected a 0.4% decline.
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Continued ideas that the US Federal Reserve will start to back out of stimulus measures soon, due to Wednesday’s release of minutes from a recent meeting, were also bearish.
However, the downside was limited the spillover support from the advances seen in commodities, including crude oil, gold and copper.
Canadian bonds moved slightly higher Thursday amid disappointing Canadian economic data, analysts said. Traders were also focusing on the downturn in the Indian economy, as it could mean reduced demand for Canadian commodities.
The two-year bond yielded 1.204% late Thursday, from 1.217% late Wednesday. The 10-year bond yielded 2.744%, from 2.753% Bond yields fall as their prices rise.
