By Commodity News Service Canada
WINNIPEG, Oct. 7 – The Canadian dollar was lower relative to the US dollar on Tuesday, seeing a downward correction following Monday’s sharp rally, analysts said.
The Canadian dollar closed at US$0.8952 or US$1=C$1.1171 on Tuesday, which compares with Monday’s North American settlement of US$0.8984 or US$1=C$1.1131.
Concerns about slow global economic growth, due to disappointing economic reports out of Asia and Germany on Tuesday, were also bearish.
Further downward pressure came from soft Canadian building permits data. Statistics Canada reported the total value of building permits issued by Canadian municipalities dropped by 27.3 per cent to C$6.7 billion in August.
Weakness in crude oil and copper also weighed on the Canadian dollar, though strength in gold prices was supportive.
Canadian bonds ended sharply higher, finding support form tumbling stock markets and concerns about slow economic growth in Germany, traders said.
The two-year bond yielded 1.085% late Tuesday, from 1.109% late Monday. The 10-year bond yielded 2.034%, from 2.090%. Bond yields fall as their prices rise.
