By Commodity News Service Canada
WINNIPEG, May 29 – The Canadian dollar closed nearly unchanged against the US dollar Friday, as traders evened positions ahead of the weekend, and the end of the month, analysts said.
The Canadian dollar closed at US$0.8041 or US$1=C$1.2437 on Friday, which compares with Thursday’s North American settlement of US$0.8042 or US$1=C$1.2435.
A sharp rally seen in crude oil prices helped to support the Canadian dollar, as oil is one of Canada’s biggest exports. Oil values were up more than four per cent on Friday.
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Ideas that recent losses were overdone were also bullish, as was continued speculation that the US Federal Reserve will wait until later in the year to raise interest rates.
On the other side, disappointing Canadian gross domestic product (GDP) data was bearish, and pushed the loonie lower earlier in the trading session. Statistics Canada said GDP was down 0.6 per cent during the first quarter of 2015, while expectations called for a 0.3 per cent gain.
Traders were also speculating that the Bank of Canada’s next interest rate move would be a cut, rather than an increase, which weighed on the currency.
Canadian bonds were up sharply on Friday, reacting to the disappointing Canadian GDP data, according to market watchers.
The two-year bond yielded 0.570% Friday, from 0.621% late Thursday. The 10-year bond yield was at 1.621%, from 1.672%. Bond yields fall as their prices rise.
