By Commodity News Service Canada
WINNIPEG, March 18 – The Canadian dollar was up sharply against the US dollar on Wednesday, gaining more than a full cent after the US Federal Reserve’s latest interest rate announcement.
The US Fed said they will not raise interest rates until they see more improvement in the labour sector, while many traders believed they would signal a rate raise would come as soon as June.
The Canadian dollar closed at US$0.7955 or US$1=C$1.2570 on Wednesday, which compares with Tuesday’s North American settlement of US$0.7827 or US$1=C$1.2776.
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Sentiment that recent declines were overdone also underpinned the Canadian currency, as did strength in gold values.
However, weakness in crude oil values and soft Canadian manufacturing data limited the upside. Statistics Canada said wholesale sales saw the largest monthly decline since January 2009 in December, falling 3.1 per cent to C$53.7 billion.
Canadian bonds closed sharply higher on Wednesday, following the US Treasury market after the US Federal Reserve interest rate announcement, brokers said.
The two-year bond yielded 0.502% Wednesday, from 0.541% late Tuesday. The 10-year bond yielded 1.322%, from 1.415%. Bond yields rise as their prices fall.
