By Commodity News Service Canada
WINNIPEG, Dec. 11 – The Canadian dollar ended sharply lower relative to the US dollar on Thursday, falling below 87 cents US and to a five-year low.
Recent weakness in crude oil values, as they’ve dropped about 40 per cent since the summer, was behind the decline. Economists are worried that the drop in oil values will weigh on Canada’s economy, analysts said.
The Canadian dollar closed at US$0.8675 or US$1=C$1.1527 on Thursday, which compares with Wednesday’s North American settlement of US$0.8711 or US$1=C$1.1480.
Better than expected retail sales in the US were also bearish, as it reinforces ideas that the US will raise interest rates before Canada does. US retail sales were up 0.7 per cent in November, beating expectations of a 0.4 per cent gain.
Canadian bonds closed mostly lower on Thursday, seeing a correction following recent sharp advances, market watchers said.
The two-year bond yielded 1.018% late Thursday, from 0.999% late Wednesday. The 10-year bond yielded 1.837%, from 1.829%. Bond yields fall as their prices rise.
