CANADA FX DEBT-C$ weakens to one-week low as oil falls

Mon Aug 22, 2016 9:59am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* Canadian dollar at C$1.2920, or 77.40 U.S. cents
    * Loonie touches its weakest since Aug. 15 at C$1.2936
    * Bond prices higher across a flatter maturity curve

    TORONTO, Aug 22 (Reuters) - The Canadian dollar weakened to
a one-week low against its U.S. counterpart on Monday as
comments by a Federal Reserve official supported the greenback
and oil prices fell, offsetting stronger-than expected domestic
    Canadian wholesale trade increased by 0.7 percent in June
from May, the third consecutive monthly gain, Statistics Canada
said. Analysts surveyed by Reuters had forecast a 0.1 percent
    The U.S. dollar firmed against a basket of major
currencies after an upbeat assessment of the U.S. economy's
strength from Fed Vice Chairman Stanley Fischer on Sunday.
Fischer's assessment was seen raising the prospect of Fed Chair
Janet Yellen flagging up a rate rise at a meeting with the
world's central bankers on Friday. 
    Oil prices fell as China ramped up exports of refined
products, U.S. oil producers added rigs for an eighth
consecutive week, and prospects emerged for increased exports
from Iraq and Nigeria. U.S. crude prices were down 2.74
percent to $47.19 a barrel.        
    At 9:41 a.m. EDT (1341 GMT), the Canadian dollar 
was trading at C$1.2920 to the greenback, or 77.40 U.S. cents,
weaker than Friday's official close of C$1.2858, or 77.77 U.S.
    The currency's strongest level of the session was C$1.2874,
while it touched its weakest since Aug. 15 at C$1.2936.
    On Friday, the loonie snapped a nearly two-week winning
streak as domestic retail sales data disappointed. 
    Speculators reduced bullish bets on the loonie for a third
straight week, Commodity Futures Trading Commission data showed
on Friday. Net long Canadian dollar positions fell to 12,473
contracts in the week ended Aug. 16 from 15,366 contracts in the
prior week. 
    Canadian government bond prices were higher across the
maturity curve, in sympathy with U.S. Treasuries. The two-year
 price rose 2.5 Canadian cents to yield 0.56 percent
and the benchmark 10-year climbed 35 Canadian cents
to yield 1.041 percent.
    The curve flattened as the spread between the 2-year and
10-year yields narrowed by 2.4 basis points to 48.1 basis
points, indicating outperformance for longer-dated maturities.
    On Thursday, the spread hit its narrowest since June 2008 at
46.8 basis points.

 (Reporting by Fergal Smith; Editing by Bernadette Baum)