CANADA FX DEBT-C$ weakens after recent rally as oil slips

Tue Oct 13, 2015 4:34pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* Canadian dollar at C$1.3019 or 76.81 U.S. cents
    * Bond prices higher across the maturity curve

 (Adds quotes, updates prices)
    TORONTO/OTTAWA, Oct 13 (Reuters) - The Canadian dollar
weakened against its U.S. counterpart on Tuesday, hurt by a
sharp fall in oil prices and gloomy trade data out of China.
    The loonie was unable to extend a recent rally that had seen
it rise 2.2 percent since the beginning of October as it
encountered technical resistance around the C$1.30 area.
    Fears that the oil market remains oversupplied saw the price
of crude end down 44 cents at $46.66 a barrel. The
Canadian dollar has been highly sensitive to the price of oil,
which is a major export for Canada.
    The domestic economic calendar is light this week, but
overseas data showed Chinese imports plunged 20 percent in
September, casting doubt on the strength of domestic demand in
the world's second-largest economy. 
    "The loonie hasn't been able to have a sustained rally and
so I think in the short-term, we see range-bound trading," said
Rahim Madhavji, president at KnightsbridgeFX.com.
    The next catalyst is likely to be the timing of the Federal
Reserve's move to raise interest rates, said Madhavji. The Fed
held rates steady at its last meeting in September and
economists are uncertain as to whether a hike will come this
year, as had been expected.
    The Canadian dollar ended the North American
trading session at C$1.3019 to the greenback, or 76.81 U.S.
cents, weaker than the Bank of Canada's official close on Friday
of C$1.2937, or 77.30 U.S. cents. 
    According to Thomson Reuters data it closed at C$1.2998, or
76.93 U.S. cents on Monday, a public holiday in Canada.
    The loonie is likely to trade around C$1.30 to C$1.32,
Madhavji said.
    Canadian government bond prices were higher across the
maturity curve, with the two-year price up 4 Canadian
cents to yield 0.540 percent and the benchmark 10-year
 rising 69 Canadian cents to yield 1.445 percent.

 (Reporting by Alastair Sharp and Leah Schnurr; Editing by
Meredith Mazzilli)