By Commodity News Service Canada
WINNIPEG, June 1 – The Canadian dollar was down sharply relative to the US dollar Monday, reacting to positive US manufacturing data, analysts said.
Traders were more confident that an interest rate hike will be coming in the US after the data, which showed the US ISM manufacturing index rose to 52.8 in May, from 51.5 last month.
The Canadian dollar closed at US$0.7978 or US$1=C$1.2535 on Monday, which compares with Friday’s North American settlement of US$0.8041 or US$1=C$1.2437.
A softer tone in crude oil values was also bearish, as were ongoing worries about slow Canadian economic growth.
There were no significant Canadian economic data releases Monday. Traders were looking ahead to April international merchandise figures on Wednesday.
Canadian bonds were mostly lower Monday, following the US Treasury market, brokers said.
The two-year bond yielded 0.564% Monday, from 0.571% late Friday. The 10-year bond yield was at 1.638%, from 1.624%. Bond yields fall as their prices rise.
