Canadian forex review: C$ closes weaker
By Commodity News Service Canada
WINNIPEG, May 27 – The Canadian dollar closed weaker against the US dollar, after the Bank of Canada left interest rates unchanged on Wednesday, as expected.
While economic growth is still in line with previous forecasts in Canada, recent strength in the Canadian dollar may slow things down going forward, the bank said.
The Canadian dollar closed at US$0.8026 or US$1=C$1.2459 on Wednesday, which compares with Tuesday’s North American settlement of US$0.8046 or US$1=C$1.2427.
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Broad strength in the US dollar, a turn away from riskier assets and weakness in crude oil also weighed on the Canadian dollar.
Though, some chart-based buying after the Canadian dollar tested the 80 cents US mark, falling to 80.06 cents US briefly during the day, limited the downside.
Canadian bonds were sharply higher on Wednesday, as traders reacted to the more dovish tone from the Bank of Canada interest rate announcement, brokers said.
The two-year bond yielded 0.631% Wednesday, from 0.648% late Tuesday. The 10-year bond yield was at 1.668%, from 1.704%. Bond yields fall as their prices rise.
