By Commodity News Service Canada
WINNIPEG, Oct. 28 – The Canadian dollar was sharply stronger relative to the US dollar, as traders were reacting to disappointing US economic data ahead of Wednesday’s US Federal Reserve interest rate announcement.
The US government reported durable goods orders dropped 1.3 per cent in September, while pre-report expectations called for a decline of just 0.7 per cent.
The Canadian dollar closed at US$0.8952 or US$1=C$1.1171 on Tuesday, which compares with Monday’s North American settlement of US$0.8898 or US$1=C$1.1238.
A rebound in crude oil futures prices after Monday’s decline was also helping to underpin the Canadian currency, analysts said.
There was no significant Canadian economic data impacting the loonie on Tuesday. Traders were looking ahead to Friday, when Statistics Canada releases its latest gross domestic product report.
Canadian bonds were lower on Tuesday, following the US Treasury market amid a lack of fresh domestic economic news, brokers said.
The two-year bond yielded 1.009% late Tuesday, from 1.000% late Monday. The 10-year bond yielded 2.027%, from 2.014%. Bond yields fall as their prices rise.
