By Commodity News Service Canada
WINNIPEG, Jan. 13 – The Canadian dollar was slightly firmer relative to the US dollar on Tuesday, seeing an upward correction following Monday’s sharp decline, analysts said.
The Canadian dollar closed at US$0.8365 or US$1=C$1.1954 on Tuesday, which compares with Monday’s North American settlement of US$0.8356 or US$1=C$1.1967.
Signs that Chinese export business is picking up was also supportive, though import demand from the country is also declining, according to reports.
Ongoing weakness in crude oil values added to the bearish tone, as the falling oil market is likely to negatively impact Canadian economic growth. This idea was reinforced by dovish comments from a Bank of Canada official Tuesday, who said the weakness in oil prices presents a downside risk to the Canadian economy.
Canadian bonds closed slightly higher on Tuesday, recovering from earlier losses after the dovish Bank of Canada commentary, market watchers said.
The two-year bond yielded 0.917% late Tuesday, from 0.924% late Monday. The 10-year bond yielded 1.603%, from 1.612%. Bond yields fall as their prices rise.
