By Commodity News Service Canada
WINNIPEG, Feb. 19 – The Canadian dollar closed sharply lower against the US dollar Thursday, undermined by falling crude oil values, analysts said.
The Canadian dollar closed at US$0.8001 or US$1=C$1.2498 on Thursday, which compares with Wednesday’s North American settlement of US$0.8053 or US$1=C$1.2418.
Further downward pressure came from Bank of Canada comments Thursday. A senior official with the bank said the recent drop in oil values could briefly push Canada’s inflation rate into the negative this spring.
Ongoing worries about global economic problems, including tensions between Ukraine and Russia, and prolonged deliberations between Greece and other euro zone members, were also bearish.
However, the downside was limited by Wednesday’s news that the US Federal Reserve is still nervous about raising interest rates.
Canadian bonds ended mostly higher on Thursday, reacting to the dovish Bank of Canada speech and worries about further interest rate cuts, brokers said.
The two-year bond yielded 0.425% Thursday, from 0.430% late Wednesday. The 10-year bond yielded 1.452%, from 1.476%. Bond yields fall as their prices rise.
