By Commodity News Service Canada
WINNIPEG, Oct. 1 – The Canadian dollar was firmer relative to the US dollar on Wednesday, seeing an upward correction after falling sharply in recent sessions, analysts said.
The Canadian dollar closed at US$0.8951 or US$1=C$1.1172 on Wednesday, which compares with Tuesday’s North American settlement of US$0.8929 or US$1=C$1.1200.
Disappointing manufacturing figures out of the US were also helping to underpin the Canadian currency. The Institute for Supply Management’s manufacturing index was at 56.6 in September, down from 59.0 in August. Pre-report expectations called for the index to come in at 58.0.
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Some spillover support also came from the gains seen in gold and copper prices, though crude oil was weaker.
Ongoing expectations that the US Federal Reserve will start to raise interest rates sooner than anticipated were bearish.
Traders were looking ahead to Friday’s US employment data, which is expected to show a strong newly created jobs figure.
Canadian bonds ended sharply higher on Wednesday, as investors were moving money out of riskier assets and into ‘safe-haven’ bonds, market watchers said.
The two-year bond yielded 1.105% late Wednesday, from 1.128% late Tuesday. The 10-year bond yielded 2.086%, from 2.151%. Bond yields fall as their prices rise.
