By Commodity News Service Canada
WINNIPEG, August 20 – The Canadian dollar was lower relative to the US dollar, with continued strength in the greenback after US Federal Reserve meeting minutes were released behind the weakness, analysts said.
The debate on whether or not to raise very low interest rates in the US seems to be heating up, which likely reflects improving economic conditions, brokers said.
The Canadian dollar closed at US$0.9115 or US$1=C$1.0971 on Wednesday, which compares with Tuesday’s North American settlement of US$0.9138 or US$1=C$1.0943.
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Weakness in gold prices was also bearish for the Canadian dollar, though the firmer tone in copper and crude oil were supportive.
Positive Canadian wholesale sales data was also bullish for the loonie. Statistics Canada reported June wholesale sales increased 0.6 per cent, beating expectations of a 0.4 per cent jump.
Canadian bonds ended lower on Wednesday amid quiet activity. The market underperformed US Treasurys due to the positive Canadian sales data, participants said.
The two-year bond yielded 1.091% late Wednesday, from 1.073% late Tuesday. The 10-year bond yielded 2.102%, from 2.074%. Bond yields fall as their prices rise.
