By Commodity News Service Canada
WINNIPEG, Feb. 10 – The Canadian dollar closed sharply lower on Tuesday, undermined by a dovish statement from Bank of Canada officials, analysts said.
A senior official at the Bank of Canada said the bank will do what it takes to get inflation in the country back to 2 per cent if it is necessary in a speech. The statement reinforced speculation that the Bank of Canada is considering cutting interest rates, brokers noted.
The Canadian dollar closed at US$0.7953 or US$1=C$1.2574 on Tuesday, which compares with Monday’s North American settlement of US$0.8022 or US$1=C$1.2465.
Read Also
Canadian Financial Close: Loonie up, TSX surges
Glacier FarmMedia – The Canadian dollar strengthened slightly coming out of the August long weekend. The loonie closed at US$0.7254 or…
More soft data out of China was also bearish, as it points to slowing economic growth in the country, which is the world’s second largest economy. Inflation in China dropped below one per cent last month, data showed.
Further downward pressure came from weakness in crude oil values on Tuesday, as well as softness in gold prices.
Canadian bonds ended mostly higher on Tuesday, finding support from the dovish comments from the Bank of Canada, traders said.
The two-year bond yielded 0.428% Tuesday, from 0.484% late Monday. The 10-year bond yielded 1.433%, from 1.431%. Bond yields fall as their prices rise.
