By Commodity News Service Canada
WINNIPEG, Jan. 29 – The Canadian dollar moved lower against the US dollar after the US Federal Reserve announced further stimulus cutbacks on Wednesday.
The US Fed announced they will be reducing their monthly bond purchases by another US$10 billion, to US$65 billion, due to improving economic conditions in the US.
The Canadian currency closed at US$0.8946 or US$1=C$1.1178 on Wednesday, which compares with Tuesday’s North American settlement of US$0.8964 or US$=C$1.1156.
Last week’s dovish Bank of Canada policy announcement also continued to overhang the loonie, analysts said.
However, sentiment that the market is oversold and spillover support from the advances seen in gold prices limited the Canadian dollar’s downside.
Canadian bonds closed higher, following the advances seen in the US Treasury market, traders said.
The two-year bond yielded 0.965% late Wednesday, from 0.970% late Tuesday. The 10-year bond yielded 2.369%, from 2.418%. Bond yields fall as their prices rise.
