By Commodity News Service Canada
Winnipeg – March 21/13 – CNS – The Canadian dollar was
trading at a firmer level versus the US currency in late North
American activity on Thursday. Much of the strength displayed by
the Canadian dollar reflected strong Canadian retail sales data
that was released early Thursday, market watchers said.
The release of the Canadian budget by the federal government
had little overall impact on the Canadian currency.
The Canadian currency late in the afternoon was quoted at
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North American quote of C$1.0254 (97.52 US cents).
The Canadian dollar did not move significantly after the
release of the Canadian government’s budget for the 2013/14
fiscal year. The government now sees a deficit of 25.9 billion
Canadian dollars in fiscal 2013/14.
The budget also outlined a number of spending cuts and
infrastructure spending aimed at generating a surplus by fiscal
2016/17.
The Canadian government delivered a budget Thursday that
limits spending growth to the slowest increase in nearly two
decades and introduces more than 75 measures to shut down tax
loopholes, as it presses ahead amid a slowing economy to hit a
balanced budget in 2015.
The government also introduced policies designed to kick-
infrastructure plan with a price tag of 53 billion Canadian
dollars that starts in 2014. There are also initiatives to aid
the manufacturing sector, which has shed 400,000 jobs since the
recession.
The budget mostly reinforced the government’s goal of a
balanced budget in 2015, even though the Canadian economy
struggles with several headwinds–from weaker consumer spending
and a softening housing market to weaker prices for Alberta
crude. The budget estimated depressed prices for Canadian
petroleum and gas products is costing the federal treasury up to
C$4 billion a year in revenue.
]
The upside in the Canadian unit was tempered by the declines
seen in global crude oil and by the losses posted in the North
American equity sector.
Canadian bonds posted advances across the yield curve on
Thursday as fixed-income markets benefited from another round of
concern about the volatile situation in Cyprus, market watchers
said.
The impasse in Cyprus was a key focus for investors
Thursday, eclipsing the Canadian government’s “stay-the-course”
budget for the FY2013/14 fiscal year.
Canada’s two-year bond yield was at 0.987% Thursday, from
0.993% Wednesday. The 10-year bond yielded 1.821%, from 1.863%.
Bond yields move inversely to bond prices.
Ottawa plans a gross domestic bond issuance of C$88 billion
in 2013-14, down from C$96 billion in 2012-13.
END
