CANADA FX DEBT-C$ unchanged vs broadly stronger greenback as oil rallies

Mon Aug 8, 2016 9:45am EDT
 
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* Canadian dollar at C$1.3164, or 75.96 U.S. cents
    * Bond prices slightly higher across the maturity curve

    TORONTO, Aug 8 (Reuters) - The commodity-linked Canadian
dollar was unchanged against its broadly firmer U.S. counterpart
on Monday as oil prices rallied and risk appetite improved.
    The Canadian dollar's steady performance against the
greenback follows steep losses on Friday as a slump in domestic
jobs and a record-wide Canadian trade deficit contrasted with a
robust U.S. jobs report.  
    Oil rose after a report of renewed calls by some OPEC
members to restrain output. U.S. crude prices were up
1.84 percent at $42.57 a barrel. 
    Adding to support for Canada's risk-sensitive currency,
stock markets rose amid increased expectations of faster growth
in the U.S. after Friday's jobs data.
    Meanwhile, the U.S. dollar rose against a basket of
major currencies.
    At 9:26 a.m. EDT (1326 GMT), the Canadian dollar 
was trading at C$1.3164 to the greenback, or 75.96 U.S. cents,
unchanged from Friday's close.
    The currency's strongest level of the session was C$1.3141,
while its weakest was C$1.3197.
    On Friday, the Canadian dollar touched a nine-day low at
C$1.3200.
    The implied probability of a Bank of Canada rate cut has
increased to 19 percent, overnight index swaps data showed. It
was 12 percent before Friday's weak domestic jobs and trade
data. 
    The value of Canadian building permits declined 5.5 percent
in June from May, data from Statistics Canada showed on Monday.
Construction intentions in multi-family dwellings and
institutional buildings led the drop.              
    Speculators reduced bullish bets on the loonie for the first
time in six weeks, Commodity Futures Trading Commission data
showed on Friday. Net long Canadian dollar positions fell to
17,758 contracts in the week ended August 2 from 23,180
contracts in the prior week. 
    Canadian government bond prices were slightly higher across
the maturity curve, with the two-year price up 0.5
Canadian cent to yield 0.518 percent and the benchmark 10-year
 rising 12 Canadian cents to yield 1.059 percent.
    The yield on Canada's 10-year bond fell 3 basis points
further below the yield on its U.S. equivalent, leaving the
spread at -54.1 basis points, its largest gap since June 2, as
Canadian government bonds outperformed.

 (Reporting by Fergal Smith; Editing by Chizu Nomiyama)