By Commodity News Service Canada
Winnipeg – May 28/13 – CNS – The Canadian dollar was trading
at a significantly weaker level versus the US currency in late
North American activity on Tuesday. Much of the downswingh in the
value of the Canadian dollar was associated with the unloading of
the unit by large institutional players, market watchers said.
Some of the liquidation of the Canadian unit was chart-
based, brokers said.
The Canadian currency late in the afternoon was quoted at
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North American quote of C$1.0337 (96.74 US cents).
Recent economic data have been supportive of the US dollar,
encouraging the sale of other currencies in its favour.
Participants were also looking ahead to the Bank of Canada’s
upcoming rate announcement on Wednesday. It is the bank’s fourth
policy announcement date of the year, and its last under the
departing Governor Mark Carney.
Canadian bonds also ended on a significantly weaker footing
Tuesday following the sharp sell-off in US Treasuries, market
watchers said. Much of the decline was linked to the release of
strong US economic data which reinforced an increasing
willingness among investors to take on riskier assets.
Canada’s two-year bond yield was at 1.070% Tuesday, from
1.044% Monday. The 10-year bond yielded 2.081%, from 1.981%. Bond
yields move inversely to bond prices.
There were no first-tier data in Canada on Tuesday, leaving
the market free to take its tone from the US, where consumer
confidence and house price data bested expectations and bolstered
stocks to the detriment of fixed-income markets.
Domestic factors could play a bigger role in the Canadian
market on Wednesday, when the Bank of Canada has its fourth
policy announcement date of the year, and its last under the
departing Governor Mark Carney.
Analysts believe the bank will keep its overnight target
rate at 1%. Most also expect the bank to keep its highly diluted
tightening bias intact.
END
