By Commodity News Service Canada
Winnipeg – February 12/13 – CNS – The Canadian dollar was
trading at a firmer level versus the US currency in late North
American activity on Tuesday. The upswing in the value of the
Canadian dollar reflected the advances seen in global crude oil
and in the North American equity sector, market watchers said.
Additional strength in the Canadian unit also came from the
green light that was given to Cnooc Ltd.’s US$15.1 billion
acquisition of Calgary-Alberta based Nexen.
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The transaction will be denominated in US dollars, the move
was expected to spark heavy demand in Canadian dollars as
Canadian shareholders are paid out and convert those funds to
loonies. Nexen said it expects Cnooc to close the acquisition the
week of Feb. 25.
The Canadian currency late in the afternoon was quoted at
C$1.0022 (99.78 US cents). This compares with Monday’s late North
American quote of C$1.0043 (99.57 US cents).
Market participants spent a good portion of the day awaiting
clarity from the Group of Seven leading nations, whose leaders
seemed to offer conflicting viewpoints of the organization’s
stance on currency valuations.
Comments from the G-7 come ahead of a meeting of finance
in Moscow on Friday and Saturday, in which members of the G-7
will be joined by their counterparts from large economies in
Latin America and Asia.
Canadian bonds posted losses along the yield curve on
Tuesday with the weakness associated with apprehension over
US President Barack Obama’s State of the Union address on
Wednesday.
Canada’s two-year bond yield was at 1.121% late Tuesday,
from 1.114% late Monday. The 10-year bond yield was at the 2.000%
level, from 1.972%. Bond yields move inversely to bond prices.
Investors avoided safe-haven assets Tuesday, hopeful that
Obama’s would use his address to urge Congress to adopt measures
aimed at boosting the US economy, analysts said.
Demand for safe-haven assets has weakened in recent weeks,
euro-zone showing reduced risk of a breakup, and China showing
signs of a gentle, rather than a harsh, slowdown.
END
