By Commodity News Service Canada
WINNIPEG, Dec. 29 – The Canadian dollar eased slightly relative to the US dollar Monday, with ongoing worries about weakening oil prices weighing on the Canadian currency.
Economists believe the recent sharp drop in the oil market will have a negative effect on Canadian economic growth, as oil is one of the country’s biggest exports.
The Canadian dollar closed at US$0.8599 or US$1=C$1.1629 on Friday, which compares with last Wednesday’s North American settlement of US$0.8604 or US$1=C$1.1623. Canadian markets were closed Thursday and Friday for Christmas and Boxing Day.
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Weakness in gold values was also bearish for the loonie, as were worries about economic problems in parts of Europe.
However, some positive economic news out of China was supportive. The Canadian dollar’s decline was also limited by light holiday-mode activity, traders said.
Canadian bonds closed higher on Monday, with concerns about political and economic problems in Greece behind the advances, brokers said.
The two-year bond yielded 1.035% late Friday, from 1.050% late Wednesday. The 10-year bond yielded 1.839%, from 1.910%. Bond yields fall as their prices rise.
