Monday May 5, 2008 - 22:21:52 GMT
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Reuters - www.reuters.com
Forex Market News -= Canadian dollar pushes higher on commodities
By John McCrank
TORONTO (Reuters) - The Canadian dollar pushed higher
against a broadly weaker U.S. dollar on Monday, boosted by
robust commodity prices, while domestic bond prices ended
The Canadian currency closed at C$1.0135 to the U.S.
dollar, or 98.67 U.S. cents, up from C$1.0193 to the U.S.
dollar, or 98.11 U.S. cents, at Friday's close.
The currency was helped by a record price for oil, at
$120.36 a barrel. Record high copper prices HGN8, and
stronger gold prices were also seen helping. Canada is a major
producer of commodities the currency is often influenced by
A big chunk of the Canadian dollar's gains can be
attributed to a broadly weaker greenback, said Eric Lascelles,
chief economics and rates specialist at TD Securities.
High commodity prices are often a recipe for U.S. dollar
weakness, but concerns about the state of the U.S. economy may
be the real driving force, he said.
"You're seeing an unwind of the trend we've been seeing
recently. You look at the recent movement in the U.S. dollar
and it had been very much stronger ... but I think a lot of
sober reflection over the weekend is prompting people to unwind
some of those moves."
Canadian data due this week includes March building permits
and the Ivey Purchasing Managers Index for April on Tuesday.
April housing starts will be released on Thursday with the
April employment report on Friday.
Canadian bond prices fell as traders repositioned
themselves ahead of the key data at the end of the week.
"Canadian bonds, for a change, are selling off, and the
U.S. is rallying. It's been a complete reversal of the trend."
"I think we're just seeing a normalization of some of the
movements of the past few weeks."
The two-year bond dipped 1 Canadian cent to C$101.93 to
yield 2.783 percent. The 10-year bond fell 11 Canadian cents to
C$102.87 to yield 3.625 percent.
The yield spread between the two- and 10-year bonds was
84.2 basis points, up from 82.6 at the previous close.
The 30-year bond slid 25 Canadian cents to C$115.00 to
yield 4.110 percent. In the United States, the 30-year treasury
yielded 4.606 percent.
The three-month when-issued T-bill yielded 2.64 percent,
down from 2.65 percent at the previous close.
(Editing by Rob Wilson)
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