Canadian dollar little changed amid mixed manufacturing data, rising bond yields - InfoNews

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Canadian dollar little changed amid mixed manufacturing data, rising bond yields

January 02, 2014 - 5:42 AM

TORONTO - The Canadian dollar started a new year of trading slightly higher amid rising U.S. bond yields and mixed manufacturing data.

The loonie was ahead 0.01 of a cent to 94.03 cents US even as the greenback strengthened against most currencies. The yield on the U.S. benchmark 10-year Treasury hit a 2 1/2 year high of 3.04 per cent.

U.S. yields have been steadily rising since May when outgoing Federal Reserve chairman Ben Bernanke first mentioned the possibility of the central bank cutting back on a key bit of stimulus, its US$85 billion of monthly bond purchases. The Fed announced last month it would start trimming those purchases by $10 billion a month starting in January with further tapering dependent on economic data.

Two manufacturing surveys released Thursday showed Chinese activity slowed in December. The China Federation of Logistics & Purchasing said its purchasing managers index declined to 51 from November’s 51.4 on a 100-point scale on which numbers above 50 show an expansion. A separate survey by HSBC Corp. declined to 50.5 from November’s 50.8.

The eurozone December manufacturing purchasing managers index was confirmed at 52.7 as expected.

However, results across the region were mixed.

The French reading was revised slightly down, but the German reading was revised marginally higher.

Italy's PMI edged higher while Spain's reading cleared the 50-mark, which signals expansion.

Traders also looked ahead to the release later in the morning of the Institute for Supply Management's latest reading on the American manufacturing sector.

Economists expect the index to show a slight slowdown in expansion, coming in at 57, down slightly from 57.3 in November.

Commodity prices were mixed in the wake of the manufacturing data with the February crude contract on the New York Mercantile Exchange down 69 cents to US$97.73 a barrel.

March copper was unchanged at US$3.40 a pound while February bullion was ahead $19.30 to US$1,221.60 an ounce.

News from © The Canadian Press, 2014
The Canadian Press

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