By Commodity News Service Canada
WINNIPEG, July 28 – The Canadian dollar ended sharply higher against the US dollar on Tuesday, as traders covered short positions ahead of Wednesday’s interest rate announcement from the US Federal Reserve, analysts said.
The US Federal Reserve began a two-day meeting on Tuesday, and is expected to make an announcement about a possible interest rate increase on Wednesday.
The Canadian dollar closed at US$0.7736 or US$1=C$1.2927 on Tuesday, which compares with Monday’s North American settlement of US$0.7666 or US$1=C$1.3045.
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Some spillover support for the Canadian currency also game from the gains seen in crude oil prices, as it is one of Canada’s biggest export products.
However, ongoing worries about Canada possibly moving into a recession this year limited the upside. Traders are also worried about economic problems in China.
Canadian bonds were lower on Tuesday, as traders were taking profits on recent gains, and ahead of the US Federal Reserve policy announcement on Wednesday, brokers said.
The two-year bond yielded 0.444% on Tuesday, from 0.469% on Monday. The ten-year bond yield was at 1.507%, from 1.557%. Bond yields rise as their prices fall.
