By Commodity News Service Canada
WINNIPEG, June 22 – The Canadian dollar was down sharply relative to the US dollar on Monday, as bond yields in the US moved higher, causing investors to put money into the US dollar, analysts said.
The US dollar, and US bond yields, moved higher in reaction to optimism that Greece will be able to solve its financial woes after an announcement that lawmakers in the country created a new proposal on pension reform.
The Canadian dollar closed at US$0.8113 or US$1=C$1.2326 on Monday, which compares with Friday’s North American settlement of US$0.8153 or US$1=C$1.2266.
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Further downward pressure came from positive US housing data. Home sales in the US were up 5.1 per cent in May, to a seasonally adjusted rate of 5.35 million, the fastest growth since November 2009, according to reports.
However, some spillover support for the Canadian dollar came from strength in crude oil prices, as it is one of Canada’s biggest exports.
Canadian bonds ended sharply lower, as traders became more optimistic that Greece will find a solution for its debt crisis, brokers said.
The two-year bond yielded 0.623% Monday, from 0.595% Friday. The 10-year bond yield was at 1.805%, from 1.717% Bond yields fall as their prices rise.
