By Commodity News Service Canada
WINNIPEG, Feb. 25 – The Canadian dollar closed stronger relative to the US dollar on Wednesday, gaining almost half a cent.
Strength in crude oil values spilled over to underpin the Canadian dollar, market watchers said.
The Canadian dollar closed at US$0.8050 or US$1=C$1.2423 on Wednesday, which compares with Tuesday’s North American settlement of US$0.8003 or US$1=C$1.2496.
Ideas that the Bank of Canada is less likely to cut interest rates further were also underpinning the currency, as the bank’s governor was less dovish than expected in a speech earlier in the week.
However, ongoing political and economic problems in Europe were tempering the upside.
There was no significant Canadian economic data released on Wednesday. Traders were looking ahead to inflation data from both the US, and Canada, on Thursday.
Canadian bonds ended little changed on Wednesday, with some support coming from strength in the US Treasury market, brokers said.
The two-year bond yielded 0.472% Wednesday, from 0.471% late Tuesday. The 10-year bond yielded 1.319%, from 1.320%. Bond yields fall as their prices rise.
