By Commodity News Service Canada
WINNIPEG, August 1 – The Canadian dollar fell sharply against its US counterpart on Thursday, due to expectations that the US government will show the unemployment rate in the country dropped in July in its report tomorrow.
Analysts noted that if the US unemployment rate drops, the US Federal Reserve may be more willing to ease out of stimulus programs sooner, rather than later.
The Canadian currency was quoted at US$0.9664, or US$1=C$1.0348 at the close on Thursday, which compares with Wednesday’s North American close of US$0.9735, or US$=C$1.0272.
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A rally in the US dollar, which was sparked by strong economic data from the country, was also bearish for the value of the Canadian dollar.
A lack of risk sentiment, due to global economic concerns, further undermined the loonie, brokers noted.
However, strength in commodity prices, including crude oil and copper, helped to limit the downside.
Canadian bonds moved sharply lower, following along with the US Treasury market amid positive US economic data, industry officials said.
The two-year bond yielded 1.188% late Thursday, from 1.157% late Wednesday. The 10-year bond yielded 2.552%, from 2.456%. Bond yields fall as their prices rise.
