By Commodity News Service Canada
WINNIPEG, Feb. 18 – The Canadian dollar closed weaker relative to the US dollar on Wednesday, following the drop seen in crude oil values, analysts said.
The Canadian dollar closed at US$0.8053 or US$1=C$1.2418 on Wednesday, which compares with Tuesday’s North American settlement of US$0.8081 or US$1=C$1.2374.
Ongoing worries that the Bank of Canada will consider making further interest rate cuts, due to the negative effect weak oil values are having on the economy, were also bearish.
However, the downside was limited by the US Federal Reserve’s latest meeting minutes, as they showed the agency is worried about raising interest rates in the US. Traders expected the Fed would consider boosting rates in the near future.
Canadian bonds ended sharply higher, reacting to the more dovish than expected tone in the US Federal Reserve meeting minutes, brokers said.
The two-year bond yielded 0.423% Wednesday, from 0.461% late Tuesday. The 10-year bond yielded 1.459%, from 1.506%. Bond yields fall as their prices rise.
