By Commodity News Service Canada
WINNIPEG, Jan. 5 – The Canadian dollar was slightly higher Monday, seeing a late-day recovery after falling below 85 cents US earlier in the trading session.
Ideas that recent losses were overdone sparked some supportive buying for the Canadian currency, according to analysts.
The Canadian dollar closed at US$0.8511 or US$1=C$1.1749 on Monday, which compares with Friday’s North American settlement of US$0.8502 or US$1=C$1.1762.
Though the Canadian dollar showed some firmness on Monday, it is not expected to last as crude oil values continued to tumble.
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If oil prices stay under pressure, so will the Canadian dollar, as it will likely hurt the Canadian economy. Oil is one of Canada’s biggest exports.
Worries about economic and political problems in Greece and other parts of Europe were also bearish for the Canadian dollar, traders said.
Canadian bonds closed sharply higher on Monday, reacting to even more weakness in crude oil values, according to market watchers.
The two-year bond yielded 0.982% late Monday, from 1.001% late Friday. The 10-year bond yielded 1.693%, from 1.747%. Bond yields fall as their prices rise.
