By Commodity News Service Canada
Winnipeg – May 1/13 – CNS – The Canadian dollar was trading
at a level that was little changed versus the US currency in late
North American activity on Wednesday. The Canadian unit had begun
the session on a lower footing with weak economic data out of
China encouraging the downswing, market watchers said.
Weakness in the North American equity sector and declines in
global crude oil also helped to generate some of the weakness in
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However, the Canadian unit was able to regain some motion to
the upside after the US Federal Reserve’s policy statement later
in the day.
The Canadian currency late in the afternoon was quoted at
C$1.0074 (99.26 US cents). This compares with Tuesday’s late
North American quote of C$1.0075 (99.26 US cents).
The Canadian currency rallied in afternoon trading after the
US Federal Reserve said it is “prepared to increase or reduce the
pace of its [asset] purchases to maintain appropriate policy
accommodation as the outlook for the labor market or inflation
changes.”
A slew of potentially market-moving events in the next few
sessions makes it difficult to predict when will happen in the
Canadian dollar, analysts said.
Late on Wednesday, departing Bank of Canada Governor Mark
Carney will speak in Edmonton on the topic “The Future of
Monetary Policy.”
The govenment is expected to name Carney’s successor soon,
but the timing of the announcement is unclear.
On Thursday, March trade data for Canada and the US will be
released, followed by the April non-farm payrolls report on
Friday.
Canadian bonds ended higher along the yield curve on
Wednesday as the market absorbed the implications of some
downbeat data and a statement from the US Federal Reserve that
pointed to the possibility monetary stimulus could be expanded if
necessary.
Canada’s two-year bond yield was at 0.917% Wednesday, from
0.924% late Tuesday. The 10-year bond yielded 1.680%, from
1.696%. Bond yields move inversely to prices.
There were no significant Canadian data Wednesday, leaving
Canadian bonds appreciated early in the session along with
US Treasurys after manufacturing and private-sector jobs data in
the US both fell short of expectations.
The market relinquished some of its gains in afternoon
trading after the Fed kept its asset-purchase program at current
levels, saying it is “prepared to increase or reduce the pace of
its [asset] purchases to maintain appropriate policy
accommodation as the outlook for the labor market or inflation
changes.”
END
