By Commodity News Service Canada
WINNIPEG, September 3 – The Canadian dollar was stronger relative to the US dollar on Wednesday, reacting to a Bank of Canada policy announcement that was slightly less dovish than expected, analysts said.
The Bank of Canada left interest rates unchanged, as expected, and remains “neutral with respect to the next change to the policy rate,” reports say.
The Canadian dollar closed at US$0.9184 or US$1=C$1.0888 on Wednesday, which compares with Tuesday’s North American settlement of US$0.9149 or US$1=C$1.0930.
Some of the gains were also linked to news that Ukraine and Russia have agreed to a cease-fire plan in eastern Ukraine and optimism that it will hold true.
Spillover support also came from the gains seen in commodities, including crude oil and gold, brokers said.
Traders were looking ahead to Friday, when Canadian and US employment data will be released.
Canadian bonds ended higher on Wednesday, erasing earlier losses, market watchers said.
The two-year bond yielded 1.120% late Wednesday, from 1.126% late Tuesday. The 10-year bond yielded 2.086%, from 2.095%. Bond yields fall as their prices rise.
