CANADA FX DEBT-C$ strengthens on crude rally, soft greenback

Wed May 6, 2015 9:28am EDT
 
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* Canadian dollar at C$1.2008 or 83.28 U.S. cents
    * Bond prices mostly lower across the maturity curve

    TORONTO, May 6 (Reuters) - The Canadian dollar rallied
against its U.S. counterpart on Wednesday as crude prices surged
to 2015 highs and the greenback stumbled on soft economic data.
    Those big drivers appeared to overshadow any market reaction
from an historic election in the oil-producing province of
Alberta, in which the left-wing New Democrats won a crushing
victory, ending the Progressive Conservatives' 44-year hold on
power. 
    The price of crude, a significant Canadian export, has
rebounded over the last month and gathered more steam on
Wednesday after the American Petroleum Institute (API) reported
that U.S. crude stocks fell, while a conflict involving Saudi
Arabia continued in Yemen, a small producer that sits on key oil
shipping routes. 
    The U.S. dollar weakened on data that showed private
employers added 169,000 jobs in April, the fewest since January
2014 and far below economists' forecast for 200,000. The
currency was already under pressure following disappointing
trade data on Tuesday that signaled the U.S. economy may have
contracted in the first quarter. 
        
    * At 9:01 a.m. EDT (1301 GMT), the Canadian dollar 
was at C$1.2008 to the greenback, or 83.28 U.S. cents, stronger
than the Bank of Canada's official close of C$1.2072, or 82.84
U.S. cents, on Tuesday.
    * The currency's strongest level of the session was C$1.1985
Its weakest level was C$1.2087.
    * U.S. crude prices were up 2.42 percent at $61.86,
while Brent crude added 2.27 percent to $69.05. 
    * The volatile Ivey PMI data is due at 10:00 a.m. EDT
.
    * Several U.S. Federal Reserve officials are expected to
speak on Wednesday.
    * The Canadian dollar is expected to trade between C$1.1960
and C$1.2060 against the U.S. dollar on Wednesday, according to
RBC Capital Markets.
    * Canadian government bond prices were mostly lower across
the maturity curve, with the two-year price down 0.5
Canadian cent to yield 0.695 percent and the benchmark 10-year
 falling 18 Canadian cents to yield 1.76 percent.
    * The Canada-U.S. two-year bond spread was 8 basis points,
while the 10-year spread was -42.5 basis points.

 (Reporting by Solarina Ho; Editing by Peter Galloway)