CANADA FX DEBT-C$ edges higher as firm domestic data offsets lower oil prices

Thu Jul 21, 2016 10:09am EDT
 
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* Canadian dollar at C$1.3040, or 76.69 U.S. cents
    * Bond prices lower across the maturity curve
    * 10-year yield touches its highest since June 24 at 1.174
percent

    TORONTO, July 21 (Reuters) - The Canadian dollar edged
higher against its U.S. counterpart on Thursday as
stronger-than-expected domestic wholesale trade offset lower oil
prices.
    The value of Canadian wholesale trade surged by 1.8 percent
in May from April, led by the motor vehicle and auto parts
subsector, Statistics Canada said. In volume terms sales rose by
1.5 percent. 
    The U.S. dollar pared some recent gains against a
basket of major currencies as Bank of Japan chief Haruhiko
Kuroda said the bank saw no need to stimulate the economy with
"helicopter money," and the European Central Bank held off with
any immediate further easing of monetary policy. 
    However, slippage in crude oil prices restrained gains for
Canada's commodity-linked currency. U.S. crude prices
were down 0.81 percent to $45.38 a barrel after a rise in U.S.
gasoline inventories helped push U.S. oil stocks to a record
high, reinforcing worries of a global oversupply. 
    At 9:46 a.m. EDT (1346 GMT), the Canadian dollar 
was trading at C$1.3040 to the greenback, or 76.69 U.S. cents,
slightly stronger than Wednesday's close of C$1.3055, or 76.60
U.S. cents.
    The currency's strongest level of the session was C$1.3023,
while its weakest was C$1.3077. On Wednesday, the loonie touched
its weakest intraday level in eight days at C$1.3097.
    A long-awaited child benefit monthly payment from the
government that kicked in on Wednesday for Canadian families is
expected to provide a small but much-needed economic boost, even
if cash-strapped consumers use some of the extra money to pay
down debt.    
    Canadian government bond prices were lower across a steeper
maturity curve in sympathy with U.S. Treasuries.
    The two-year price fell 3 Canadian cents to yield
0.62 percent and the benchmark 10-year declined 30
Canadian cents to yield 1.155 percent. The 10-year yield touched
its highest since June 24 at 1.174 percent.
    The curve steepened as the spread between the 2-year and
10-year yields widened by 1.5 basis points to 53.5 basis points,
indicating underperformance for longer-dated maturities.
    Canadian retail sales data for May and inflation data for
June are due on Friday.

 (Reporting by Fergal Smith Editing by W Simon)