By Commodity News Service Canada
WINNIPEG, June 17 – The Canadian dollar ended stronger relative to the US dollar on Wednesday, reacting to the US Federal Reserve’s latest policy statement, as it was more dovish than anticipated, analysts said.
The US Fed cut its growth outlook for 2015 in the statement, and also cut its rate projection for 2016/17, reports say.
The Canadian dollar closed at US$0.8173 or US$1=C$1.2236 on Wednesday, which compares with Tuesday’s North American settlement of US$0.8122 or US$1=C$1.2312.
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Further support came from strength in crude oil prices and positive Canadian wholesale trade data. Statistics Canada said wholesale sales rose 1.9 per cent to C$55.2 billion in April, the second consecutive monthly increase. Pre-report expectations called for just a 0.3 per cent jump.
However, ongoing expectations that the US Federal Reserve will raise interest rates before the Bank of Canada were overhanging the currency.
Canadian bonds were steady to slightly softer on Wednesday, as the dovish statement from the US Federal Reserve took them off the lows of the day, brokers said.
The two-year bond yielded 0.608% Wednesday, unchanged from Tuesday. The 10-year bond yield was at 1.755%, from 1.744% Bond yields fall as their prices rise.
