By Commodity News Service Canada
Winnipeg – May 21/13 – CNS – The Canadian dollar was trading
at a slightly firmer level versus the US currency in late North
American activity on Tuesday. Some of the early upswing in the
value of the Canadian unit came from hopes that outgoing Bank of
Canada Governor Mark Carney would provide some good news in his
final speech late Tuesday afternoon, market watchers said.
The Canadian currency late in the afternoon was quoted at
C$1.0267 (97.39 US cents). This compares with Friday’s late
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Sentiment that recent losses in the Canadian unit were
overdone also helped the currency to strengthen slightly, brokers
said.
The Canadian dollar also drew support from comments made by
an official with the US Federal Reserve who indicated the US
central bank should maintain the status quo on its
bond-purchasing program.
Those remarks from St. Louis Fed President James Bullard
prompted a general retreat by the US dollar, enabling the
Canadian unit to firm.
In his last speech as governor of the bank before departing
on June 1 to take over the reins at the Bank of England, Carney
didn’t address the short-term outlook for the economy or monetary
policy, other than observing that “stimulus will be withdrawn
The upside in the Canadian unit was tempered by the sell off
seen in both crude oil and gold values.
Canadian bonds ended on a mostly weaker footing along the
yield curve on Tuesday with the market taking direction from US
Treasurys and playing a bit of catch-up after the Victoria Day
holiday on Monday, market watchers said.
The two-year bond yield was at 1.013% Tuesday, from 1.011%
late Monday. The 10-year bond yield was 1.923%, from 1.922%. Bond
yields move inversely to prices.
Outgoing Bank of Canada Governor Mark Carney delivered his
last speech as governor Tuesday, but didn’t address the
short-term outlook for the economy or monetary policy, other than
observing that “stimulus will be withdrawn appropriately as
threats diminish.”
The absence of any clear signals of a policy change at
Canada’s central bank left the market exposed to influences from
the US, enabling it to trim losses after St. Louis Fed President
James Bullard said the US Federal Reserve should continue with
its present bond-buying program and adjust the rate of purchases
in view of incoming data on growth and inflation.
Canadian retail sales data for March are scheduled to be
released Wednesday,
END
