By Commodity News Service Canada
WINNIPEG, July 15 – The Canadian dollar was sharply lower against the US dollar on Tuesday, falling below the 93 cents US mark.
Much of the weakness was linked to expectations that the Bank of Canada will make dovish remarks about the Canadian economy in their policy announcement on Wednesday, analysts said.
The Canadian dollar closed at US$0.9295 or US$1=C$1.0758 on Tuesday, which compares with Monday’s North American settlement of US$0.9333 or US$1=C$1.07.
News from US Federal Reserve Chairwoman Janet Yellen that interest rates will start to rise faster than expected if economic data continues to be strong in the US was also bearish for the Canadian dollar.
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The loonie’s weakness was linked to spillover pressure from the sharp declines seen in crude oil and gold prices as well, traders said.
Canadian bonds closed narrowly mixed, as traders continued to be cautious before the Bank of Canada’s policy announcement Wednesday, market watchers said.
The two-year bond yielded 1.099% late Tuesday, from 1.098% late Monday. The 10-year bond yielded 2.215%, from 2.214%. Bond yields fall as their prices rise.
