By Commodity News Service Canada
WINNIPEG, May 7 – The Canadian dollar ended lower relative to the US dollar on Thursday, following the plunging price of oil, analysts said.
The Canadian dollar closed at US$0.8251 or US$1=C$1.2120 on Thursday, which compares with Wednesday’s North American settlement of US$0.8306 or US$1=C$1.2040.
Positive unemployment data out of the US was also bearish, as it points to strong labour force figures, which are to be released on Friday. Any signs of growth in the US labour market reinforce expectations that the US Federal Reserve will raise interest rates later this year.
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According to the US government, US jobless claims rose by 3,000 to 265,000 during the week ended May 2, below expectations of 275,000 jobless claims.
Ongoing worries about the Bank of Canada making further cuts to interest rates further weighed on the loonie. Though, traders kept some caution in the market ahead of domestic labour data on Friday.
Positive Canadian building data was also supportive. Statistics Canada said the value of building permits was up 11.6 per cent in March, beating expectations of a 2.0 per cent rise.
Canadian bonds were higher on Thursday, following the US Treasury market. Ideas that recent weakness was overdone also supported bonds, brokers said.
The two-year bond yielded 0.685% late Thursday, from 0.699% late Wednesday. The 10-year bond yield was at 1.747%, from 1.823%. Bond yields fall as their prices rise.
