By Commodity News Service Canada
WINNIPEG, April 8 – The Canadian dollar strengthened relative to the US dollar on Tuesday, reacting to the broad weakness in the US dollar, sparked by concerns about political problems in Ukraine, analysts said.
The Canadian dollar closed at US$0.9156 or US$1=C$1.0922 on Tuesday, which compares with Monday’s North American settlement of US$0.9116 or US$1=C$1.0969.
Spillover support from the strength seen in other commodity-linked currencies, including the Australian and New Zealand dollars, was also bullish for the Canadian dollar.
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News that the Liberal party won a majority government in Quebec Monday night, eliminating the separatist Parti Quebecois from power, was also slightly supportive.
However, disappointing Canadian housing starts data tempered the loonie’s upside. Housing starts dropped by 17.7 per cent in March, while the amount of building permits issued fell by 11.6 per cent, Canada Mortgage and Housing Corporation said.
Canadian bonds ended fractionally higher, following the advances seen in the US Treasury market. However, nervousness ahead of the Bank of Canada’s monetary policy report on April 16 limited the upside, brokers said.
The two-year bond yielded 1.082% late Tuesday, from 1.082% late Monday. The 10-year bond yielded 2.460%, from
2.462%. Bond yields fall as their prices rise.
