Canadian Forex Review: C$ Eases

By Commodity News Service Canada

Winnipeg – January 3/13 – CNS – The Canadian dollar was
trading at a weaker level versus the US currency in late North
American activity on Thursday. Much of the downswing in the value
of the Canadian dollar reflected the release of minutes from the
last US Federal Reserve meeting, market watchers said.

The minutes from the US Federal Reserve’s latest policy
meeting showed several members in favour of ending bond-buying
stimulus measures later this year.

The Canadian currency late in the afternoon was quoted at
C$0.9878 (101.23 US cents). This compares with Wednesday’s late
North American quote of C$0.9848 (101.54 US cents).

The losses in the value of the Canadian dollar also
reflected the sell-off experienced in the North American equity
sector. Declines in global crude oil and gold values further
eased the value of the Canadian currency, brokers said.

Market participants were now anticipating the release of
employment numbers in both Canada and the US on Friday.

The Canadian economy is believed to have added a net 5,000 new jobs in December, according to a consensus published by the Royal Bank of Canada. The jobless rate is expected to climb to

The US economy, meanwhile, is expected to have added a net 160,000 new jobs in December, with the unemployment rate holding steady at 7.7%.

Canadian bonds finished with sharp losses across the yield curve on Thursday as the details of the US Federal Reserve’s most recent policy meeting showed several members pushing to stop bond-buying stimulus before the end of this year.

Canadian bonds were already lower on the day before the FOMC minutes were released, with hints of an improving US jobs market draining demand for safe, low-yielding government debt, analysts said.

Canada’s two-year bond yield was at 1.188% late Thursday,
from 1.170% late Wednesday. The 10-year bond was yielding 1.926%
late Thursday, a high not seen since mid-October. It was at

In December, the Fed’s policy-setting FOMC said it would buy US$45 billion of long-term Treasury bonds each month, on top of its monthly mortgage bond purchases, but gave little hint that
the board was split on the new asset-purchase plan.
END

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