By Commodity News Service Canada
Winnipeg – June 13/13 – CNS – The Canadian dollar was
trading at a firmer level versus the US currency in late North
American activity on Thursday. The upswing in the value of the
Canadian currency was associated with the uncertainty about the
evolution of monetary policy at the US Federal Reserve, market
watchers said.
The Canadian currency late in the afternoon was quoted at
C$1.0159 (98.43 US cents). This compares with Wednesday’s late
North American quote of C$1.0168,(97.92 US cents).
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Global market developments were driving trading in the
US/Canadian dollar pair in the absence of any first-tier economic
data or other market-moving events on the domestic front.
The dominant theme in currency markets was a continued
retreat from the US dollar, with investors showing a particular
preference for the safe-haven Japanese yen amid the market
turbulence generated by the uncertainty about when the US might
start to reduce its asset-purchase programs.
In domestic data, Canada’s industrial capacity utilization
rate rose to 81.1% in the first quarter on gains in the energy
and mining industries and the first increase in the manufacturing
sector in three quarters.
Statistics Canada also reported that prices of new houses
On Friday, manufacturing data for April will be released.
Canadian bonds finished on a firmer footing along the yield
curve Thursday with the investor concern about the global economy
and the wanting of safe haven government issues, behind the
strength, market watchers said.
The uncertainty about the direction of monetary policy at
the US Federal Reserve also helped safe haven issues, brokers
said.
Canada’s two-year bond yield is at 1.132% Thursday, from
1.168% Wednesday. The 10-year bond yielded 2.146%, from 2.210%.
Bond yields move inversely to bond prices.
Global markets were unsettled Thursday as speculation
persisted about the timing of the US Federal Reserve’s reduction
of its asset-purchase programs and its potential impact on asset
markets.
Markets will likely remain volatile before the Fed’s
next week.
The market largely shrugged off some solid second-tier
domestic data released in Canada Thursday that tended to
reinforce recent conjecture the Bank of Canada could act on its
conditional tightening bias earlier than previously expected.
Canada’s industrial capacity utilization rate rose to 81.1%
in the first quarter on gains in the energy and mining industries
and the first increase in the manufacturing sector in three
quarters.
It was the second consecutive increase in overall capacity
use, and slightly less than the 81.5% consensus forecast cited in
a report from Royal Bank of Canada.
Statistics Canada also reported that prices of new houses
nationwide was up 0.2% following a 0.1% gain in March.
END
