By Commodity News Service Canada
WINNIPEG, June 17 – The Canadian dollar ended softer relative to the US dollar on Tuesday, reacting to better than expected US inflation data, analysts said.
The US government reported that the consumer price data in the US rising 0.4 per cent in May, which compared with expectations of a 0.2 per cent rise.
The Canadian dollar closed at US$0.9205 or US$1=C$1.0864 on Tuesday, which compares with Monday’s North American settlement of US$0.9224 or US$1=C$1.0841.
Spillover pressure from the weakness in gold and crude oil values was also responsible for some of the Canadian currency’s downward slide.
Some caution ahead of the US Federal Reserve’s meeting minutes later this week and Canadian consumer price and retail sales data on Friday tempered the downside.
Canadian bonds closed lower, also reacting to the surprisingly positive US consumer price data, market watchers said.
The two-year bond yielded 1.111% late Tuesday, from 1.100% late Monday. The 10-year bond yielded 2.306%, from 2.291%. Bond yields fall as their prices rise.
