By Commodity News Service Canada
WINNIPEG, Feb. 3 – The Canadian dollar ended sharply higher relative to the US dollar on Tuesday, as crude oil values rallied above $50 per barrel, analysts said.
The Canadian dollar closed at US$0.8067 or US$1=C$1.2711 on Tuesday, which compares with Monday’s North American settlement of US$0.7951 or US$1=C$1.2577.
A weakening US dollar, due to some soft economic data released on Tuesday, including factory orders, was also supportive.
The Canadian currency was further underpinned by ideas that recent losses were overdone, and the loonie was due for an upward correction.
However, ongoing worries about slow global economic growth and speculation that the Bank of Canada could cut interest rates even further tempered the upside.
Canadian bonds ended lower on Tuesday, giving back some of their recent large gains. The strength in crude oil was weighing on bonds, market watchers said.
The two-year bond yielded 0.429% Tuesday, from 0.395% late Monday. The 10-year bond yielded 1.298%, from 1.239%. Bond yields fall as their prices rise.
