By Commodity News Service Canada
WINNIPEG, September 4 – The Canadian dollar was firmer relative to the US dollar on Thursday, but fell from earlier gains that saw the loonie jump above 92 cents US.
The Canadian dollar closed at US$0.9196 or US$1=C$1.0874 on Thursday, which compares with Wednesday’s North American settlement of US$0.9184 or US$1=C$1.0888.
Better than expected Canadian trade data helped to underpin the Canadian currency, analysts said. Statistics Canada reported Canada’s trade surplus widened to C$2.58 billion in July, as exports increased by 1.4 per cent and imports dropped 0.3 per cent.
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Further support came from news that the European Central Bank surprisingly announced a new stimulus program that will see the bank buying financial assets to help support an economic recovery.
However, spillover pressure from the weakness seen in commodity prices, including crude oil and gold, helped to take the Canadian currency off its highs of the day.
Profit taking after the market moved above 92 cents US and ahead of Friday’s Canadian and US employment data was also bearish.
Canadian bonds ended lower on Thursday, reacting to the positive Canadian trade data. Positioning ahead of Friday’s North American jobs data was also a feature of activity, brokers said.
The two-year bond yielded 1.126% late Thursday, from 1.119% late Wednesday. The 10-year bond yielded 2.122%, from 2.084%. Bond yields fall as their prices rise.
