By Commodity News Service Canada
WINNIPEG, Oct. 22 – The Canadian dollar was softer relative to the US dollar on Wednesday, undermined by disappointing Canadian economic data, analysts said.
According to Statistics Canada, retail sales dropped 0.3 per cent in August, to C$42.4 billion. It was second consecutive monthly decline, following gains in the previous six months.
The Canadian dollar closed at US$0.8894 or US$1=C$1.1243 on Wednesday, which compares with Tuesday’s North American settlement of US$0.8906 or US$1=C$1.1228.
Weakness in crude oil and gold prices also spilled over to weigh on the Canadian dollar on Wednesday.
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However, the loonie found support after the Bank of Canada released its latest policy statement. The central bank is leaving its key rate unchanged, but increased its economic growth forecast slightly for 2014.
Canadian bonds were mixed after the release of the Bank of Canada policy announcement on Wednesday. The market wasn’t showing any reaction to news that of a shooting at Parliament Hill in Ottawa, traders said.
The two-year bond yielded 0.985% late Wednesday, from 0.976% late Tuesday. The 10-year bond yielded 1.964%, from 1.966%. Bond yields fall as their prices rise.
