By Commodity News Service Canada
Winnipeg, July 31 – The Canadian dollar closed with minimal change on Thursday as economic growth figures for May came in better than expected, analysts say.
The loonie closed at US$0.9171 or US$1 = C$1.0890 as Statistics Canada reported that gross domestic products grew by 0.4 per cent during the month, which was better than the 0.3 per cent that economists had expected.
The Canadian report came out one day after other data showed that U.S. gross domestic product grew by an annual pace of four per cent in the second quarter, after contracting 2.1 per cent in the January to March period because of severe winter weather.
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The U.S currency strengthened against other currencies Thursday amid interest rate concerns.
The U.S. Federal Reserve wrapped up its interest rate meeting Wednesday and indicated that it will keep the short-term interest rates low for ‘a considerable time’ after it ends its bond purchases, likely in October. Markets have generally expected the Fed to start hiking rates mid-205, but much stronger than expected economic growth in the second quarter had investors concerned that the Fed could hike rates sooner than expected.
Canada’s two-year bond yield was at 1.104 per cent on Thursday, from 1.106 per cent on Wednesday. The 10-year bond yielded 2.167 per cent from 2.163 per cent.
