By Commodity News Service Canada
WINNIPEG, August 6 – The Canadian dollar was up sharply relative to the US dollar on Wednesday, underpinned by positive Canadian trade data, analysts said.
According to Statistics Canada, Canada’s trade surplus jumped to C$1.9 billion in June, from a revised C$576 million in May. Exports increased by 1.1 per cent, while imports declined by 1.8 per cent in June.
The Canadian dollar closed at US$0.9163 or US$1=C$1.0913 on Wednesday, which compares with Tuesday’s North American settlement of US$0.9124 or US$1=C$1.0960.
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Some of the advances were also linked to ideas that recent losses were overdone. Strength in gold prices was also bullish for the loonie, as was profit taking against the US dollar.
However, weakness in crude oil and a lack of interest in buying riskier assets amid worries about political problems in Ukraine and Russia were bearish.
Canadian bonds ended mixed, with positive Canadian trade data undermining front-end bonds. Long-term bonds were supported by increased appetite for safe-haven assets due to geopolitical worries, market watchers said.
The two-year bond yielded 1.083% late Wednesday, from 1.078% late Tuesday. The 10-year bond yielded 2.111%, from 2.114%. Bond yields fall as their prices rise.
