By Commodity News Service Canada
WINNIPEG, March 5 – The Canadian dollar closed sharply higher Wednesday, gaining more than half a cent against the US dollar.
Short covering following the Bank of Canada’s announcement, which kept interest rates and the outlook for Canada’s economy unchanged, helped the currency move higher.
The Canadian dollar closed at US$0.9060 or US$1=C$1.1038 on Wednesday, which compares with Tuesday’s North American settlement of US$0.9009 or US$=C$1.1100.
Disappointing US employment data helped to support the Canadian dollar, with only 139,000 jobs added to the private sector in February, analysts said. Expectations called for 160,000 new jobs.
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Easing fears about the political turmoil between Ukraine and Russia also helped to increase risk appetite, which was supportive for the currency.
However, spillover pressure from the declines seen in crude oil values limited the Canadian dollar’s upside, market watchers said.
Canadian bonds were mixed Wednesday, reacting to the Bank of Canada’s decision to keep its economic outlook and interest rates unchanged, brokers said.
The two-year bond yielded 1.035% late Wednesday, from
1.031% late Tuesday. The 10-year bond yielded 2.459%, from
2.475%. Bond yields fall as their prices rise.
