By Commodity News Service Canada
WINNIPEG, Dec. 2 – The Canadian dollar moved sharply lower relative to the US dollar on Tuesday, reacting to tumbling crude oil values, analysts said.
The Canadian dollar closed at US$0.8777 or US$1=C$1.1394 on Tuesday, which compares with Monday’s North American settlement of US$0.8828 or US$1=C$1.1328.
Weakness in gold prices, positive construction data out of the US and ongoing worries about slow economic growth in China were also bearish.
There was no significant Canadian economic news released on Tuesday. Traders were looking ahead to Wednesday’s latest Bank of Canada interest rate announcement. The Bank of Canada is expected to leave interest rates unchanged at one per cent.
Canadian bonds closed sharply lower as well, undermined by continued profit-taking on last week’s rally, market watchers said.
The two-year bond yielded 1.010% late Tuesday, from 0.991% late Monday. The 10-year bond yielded 1.951%, from 1.898%. Bond yields fall as their prices rise.
