By Commodity News Service Canada
Winnipeg – December 14/12 – CNS – The Canadian dollar was trading at a slightly weaker level versus the US currency in late North American activity on Friday. The downswing in the value of the Canadian currency was associated in part with the release of weak domestic economic data earlier in the session, market watchers said.
The Canadian currency late in the afternoon was quoted at C$0.9860 (101.41 US cents). This compares with Thursday’s late North American quote of C$0.9847 (101.55 US cents).
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Statistics Canada reported Canadian manufacturing sales were down 1.4% in October, to C$48.8 billion, falling below pre-report expectations of a 0.2% decline.
Concerns about the impending US ‘fiscal cliff’ had traders shying away from riskier assets, including the Canadian dollar, which was also responsible for the unit’s weakness.
However, strong Chinese manufacturing data helped to limit the Canadian currency’s downside potential. China’s HSBC Corp. announced its preliminary December Purchasing Managers’ Index rose to 50.9, from 50.5 in November.
Strength in global crude oil futures also helped to temper the easing of the Canadian dollar, brokers said.
Canadian bonds were little changed along the yield curve on Friday in activity described as quiet by market participants. Uncertainty surrounding US budget negotiations accounted for the lack of clear direction, market watchers said.
Canada’s two-year bond yield was at 1.127 late Friday, from 1.119% late Thursday. The 10-year bond yielded 1.793%, from 1.800%. Bond yields move inversely to bond prices.
Investors were viewed as jittery, as year end draws closer without sign of progress on resolving the so-called US fiscal cliff, the January 1 tax hikes and spending cuts that threaten to push the US back into recession.
