By Commodity News Service Canada
WINNIPEG, Feb. 24 – The Canadian dollar closed stronger against the US dollar on Tuesday, jumping back above the 80 cents US mark.
The advance was linked to a speech by Bank of Canada Stephen Poloz, which was less dovish than expected, analysts said. Poloz said the January interest rate cut was “insurance”, and the bank is now in a wait and see mode.
The Canadian dollar closed at US$0.8003 or US$1=C$1.2496 on Tuesday, which compares with Monday’s North American settlement of US$0.7952 or US$1=C$1.2576.
Ideas that recent losses in the Canadian dollar were overdone also underpinned the currency, though weakness in crude oil was bearish.
Ideas that the US Federal Reserve is thinking about raising interest rates, after a speech by chairwoman Janet Yellen, also undermined the loonie.
Canadian bonds ended mixed on Tuesday, as traders digested new statements from both the Bank of Canada and US Federal Reserve, brokers said.
The two-year bond yielded 0.468% Tuesday, from 0.388% late Monday. The 10-year bond yielded 1.316%, from 1.736%. Bond yields fall as their prices rise.
