By Commodity News Service Canada
WINNIPEG, Dec. 15 – The Canadian dollar ended sharply lower relative to the US dollar on Monday, falling below the 86 cents US mark and hitting the lowest level since July 2009.
The Canadian dollar closed at US$0.8579 or US$1=C$1.1656 on Monday, which compares with Friday’s North American settlement of US$0.8642 or US$1=C$1.1572.
The continued downward spiral of crude oil values was behind the loonie’s decline, as the recent weakness in the market will likely slow economic growth in Canada, analysts said.
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The strengthening US dollar ahead of the US Federal Reserve’s next interest rate announcement on Wednesday was also bearish. The trade believes that the US will raise interest rates before Canada does.
Traders were looking ahead to some key Canadian economic data later this week as well, including manufacturing shipments, retail trade and November’s consumer price index reading.
Canadian bonds closed lower on Monday, undermined by some liquidation ahead of Wednesday’s US Federal Reserve announcement, brokers said.
The two-year bond yielded 0.978% late Monday, from 0.963% late Friday. The 10-year bond yielded 1.787%, from 1.758%. Bond yields fall as their prices rise.
