CANADA FX DEBT-C$ flat vs U.S. dollar as Turkey jitters fade, oil dips

Mon Jul 18, 2016 4:46pm EDT
 
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* Canadian dollar ends at C$1.2937, or 77.30 U.S. cents
    * Bond prices flat to slightly lower across the maturity
curve

    By Alastair Sharp
    TORONTO, July 18 (Reuters) - The Canadian dollar ended
unchanged against its U.S. counterpart on Monday as the market
brushed off the news of a purge after a failed coup in Turkey
and oil prices fell.
    The loonie, as Canada's currency is colloquially known,
gained against the safe-haven Japanese yen and Swiss franc, but
lost ground against emerging market currencies, including
Mexico's peso and Russia's ruble.
    Turkey detained or suspended nearly 20,000 members of the
police, army, judiciary and civil service following last
Friday's violence. 
    Oil prices fell as rising stockpiles of crude and refined
fuel intensified fears another major glut was building up. 
    "The market seems to be looking through the failed military
coup in Turkey and risk assets continue to perform relatively
well," said Blake Jespersen, managing director, foreign exchange
sales at BMO Capital Markets. "It was a short-lived selloff."
    The Canadian dollar settled at C$1.2937 to the
greenback, or 77.30 U.S. cents, the same level the currency
closed at on Friday.
    The currency's strongest level of the session was C$1.2927,
while its weakest was C$1.3023.
    The loonie rose 0.8 percent last week as a somewhat
optimistic update from the Bank of Canada lowered expectations
for an interest rate cut. 
    Jespersen said he is "not really looking for the Canadian
dollar to slide a whole lot further from here" following the
central bank's outlook, with C$1.3050 likely proving tough to
breach in the short term.
    The implied probability of a rate cut this year has fallen
below 10 percent, overnight index swaps data showed. It had been
above 30 percent in the week following the British referendum
vote on June 23 to leave the European Union. 
    Foreign investors snapped up relatively large amounts of
Canadian securities for the fifth month in a row in May,
Statistics Canada said on Monday. 
    Speculators increased bullish bets on the loonie for the
third straight week, Commodity Futures Trading Commission data
showed on Friday. 
    Canadian government bond prices were flat to slightly lower
across the maturity curve on Monday, with the two-year
 price down 0.2 of a Canadian cent to yield 0.579
percent and the benchmark 10-year fell 15 Canadian
cents to yield 1.098 percent.
    Canadian small business lending picked up slightly in May to
halt a five-month slide, PayNet data showed, but appetite for
loans remained subdued and a measure of delinquencies hit its
highest since 2011. 
    Canadian retail sales data for May and inflation data for
June are awaited on Friday.

 (Additional reporting by Fergal Smith, editing by G Crosse)