By Commodity News Service Canada
WINNIPEG, Feb. 12 – The Canadian dollar closed sharply higher relative to the US dollar on Thursday, following the gains seen in crude oil values, analysts said.
The Canadian dollar closed at US$0.8006 or US$1=C$1.2490 on Thursday, which compares with Wednesday’s North American settlement of US$0.7911 or US$1=C$1.2641.
General weakness in the US dollar, after some disappointing US retail sales data, was also bullish. Data showed US retail sales fell 0.8 per cent in January, lower than expectations calling for a 0.5 per cent decline.
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Easing concerns about political problems in Ukraine, as news that Russia, Ukraine, France and Germany have produced a preliminary peace deal for the country, were also supportive.
Further support came from optimism that Greece will come to a deal with the other euro zone countries to help improve its financial situation.
However, ongoing worries about the negative impact weak oil prices are having on Canada’s economy and speculation that the Bank of Canada is prepared to make another interest rate cut were bearish.
Canadian bonds ended higher on Thursday, underpinned by the weak US retail sales data, market watchers said.
The two-year bond yielded 0.416% Thursday, from 0.448% late Wednesday. The 10-year bond yielded 1.392%, from 1.450%. Bond yields fall as their prices rise.
