By Commodity News Service Canada
WINNIPEG, Oct. 21 – The Canadian dollar was sharply higher relative to the U.S. dollar on Tuesday, gaining nearly half a cent and breaking back above 89 cents U.S.
The Canadian dollar closed at U.S.$0.8906 or U.S.$1=C$1.1228 on Tuesday, which compares with Monday’s North American settlement of U.S.$0.8862 or U.S.$1=C$1.1284.
The Canadian currency’s advance was linked to better than expected Chinese economic data. Reports say China’s economic growth slowed to 7.3 per cent last quarter, which was above expectations calling for growth to slow to 7.2 per cent.
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Strength in commodity prices, including crude oil and gold, helped to lift the Canadian dollar as well.
There was no significant Canadian economic data on Tuesday. Traders were looking ahead to retail sales figures on Wednesday. The Bank of Canada also makes its latest interest rate announcement on Wednesday.
Canadian bonds were lower on Tuesday, as investors were moving into riskier assets in light of the positive economic data out of China, market watchers said.
The two-year bond yielded 0.976% late Tuesday, from 0.964% late Monday. The 10-year bond yielded 1.961%, from 1.938%. Bond yields fall as their prices rise.
