By Commodity News Service Canada
Winnipeg – December 28/12 – CNS – The Canadian dollar was
trading at a weaker level versus the US currency in late North
American activity on Friday. The downswing in the value of the
Canadian dollar was associated with investor concern that the US
Government will not be able to finalize its budget talks before a
year end deadline, market watchers said.
The Canadian currency late in the afternoon was quoted at
C$0.9961 (100.39 US cents). This compares with Thursday’s late
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With little in the way of fresh economic indicators Friday,
the Canadian dollar moved largely on developments stemming from
ongoing negotiations between US legislators ahead of a round of
spending cuts and tax hikes that would begin in January.
On Friday, US President Barack Obama met with congressional
leaders at the White House to hammer out a last-minute deal to
prevent the US economy from falling off the so-called “fiscal
cliff.” Earlier in the day, Obama said he plans to offer a
scaled-back budget package when meeting with House
representatives.
Additional weakness in the Canadian dollar was linked to the
downturn in global crude oil values and the sell-off experienced
in the North American equity sector, brokers said.
Canadian bonds finished with small gains across the yield
curve on Friday with much of the strength coming from safe haven
plays by investors concerned about US spending cuts and tax
hikes, market watchers said.
Canada’s two-year bond yield is at 1.134% Friday, from
1.139% late Thursday. The 10-year bond yields 1.777%, from
1.793%. Bond yields move inversely to bond prices.
Some of the strength was also linked to the uptrend in US
treasuries, brokers said.
END
