Canadian dollar advances, greenback weakens on Fed rate expectations
TORONTO - The Canadian dollar registered a solid gain Wednesday amid general U.S. dollar weakness and higher commodity prices.
The loonie rose 0.23 of a cent to 91.89 cents US.
Analysts pointed to low expectations for first-quarter U.S. gross domestic product growth, owing to the severe winter weather, and suggestions the American economy may have contracted during the January-March period.
"Accordingly, the expectations for Fed interest rate hikes have been pared back slightly," said Camilla Sutton, chief FX strategist, managing director, Scotiabank Global Banking and Markets.
Those expectations also sent the benchmark U.S. 10-year Treasury sharply lower. It slipped nine basis points on the day to 2.528 per cent, the lowest level since last October on a closing basis.
On the commodity markets, June crude in New York gained 67 cents to US$102.37 a barrel.
July copper gained two cents to US$3.16 a pound while June gold bullion rose $11.10 to US$1,305.90 an ounce.
Statistics Canada releases the March report on manufacturing shipments on Thursday.
Traders will also look to the release of April existing home sales data Thursday morning.
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