November 24, 2016 / 9:37 PM / 10 months ago

CANADA FX DEBT-C$ barely higher against greenback as oil edges higher

(Adds dealer comment, updates prices to close)
    * Canadian dollar settles at 74.12 U.S. cents or C$1.3491
per USD
    * Bond prices lower across the yield curve

    By Alastair Sharp
    TORONTO, Nov 24 (Reuters) - The Canadian dollar ended little
changed against its U.S. counterpart in subdued trade on
Thursday as the greenback trimmed some recent gains against a
basket of major currencies and oil edged higher.
    A modest pullback for the U.S. dollar came amid
thinner volumes, with U.S. markets closed for the Thanksgiving
holiday.
    "With London closing midway through the North American
session that leaves only essentially Canadian banks staffed, and
markets have behaved accordingly," said Brad Schruder, director
of corporate sales and structuring at BMO Capital Markets in
Toronto.
    The currency's strongest level of the session was C$1.3477,
while its weakest was C$1.3535.
    Oil prices steadied ahead of next week's meeting of the
Organization of the Petroleum Exporting Countries (OPEC) to
discuss implementation of its proposed cap on production. 
    Schruder said an OPEC deal could give a short-term boost to
the currency of Canada, a major oil exporter, but it would be
unlikely to last.
    "The reality is that U.S. companies have the technology now
to really quickly adjust production, and as prices rise they're
going to react accordingly," he said.
    Brent crude futures settled up 5 cents at $49.00 a
barrel. U.S. West Texas Intermediate (WTI) crude was last
up 2 cents at $47.98. 
    The Canadian dollar settled at C$1.3491 to the
greenback, or 74.12 U.S. cents, barely stronger than Wednesday's
close of C$1.3496, or 74.10 U.S. cents.
    The loonie last week touched its weakest in eight months at
C$1.3589.
    BMO's Schruder said he expects further loonie depreciation
against the greenback in the next three to six months as the
U.S. Federal Reserve appears set to hike interest rates while
the Bank of Canada stands pat.
    The number of non-farm payroll jobs was up 65,200 in
September, following a decline of 12,600 in August, Statistics
Canada said.
    Canadian government bond prices were lower across the yield
curve, with the two-year down 4 Canadian cents to
yield 0.686 percent and the benchmark 10-year fell
45 Canadian cents to yield 1.588 percent.
    On Wednesday, the 10-year yield touched its highest intraday
since December at 1.614 percent.
    Bond yields have been rising since the U.S. election as
investors bet that President-elect Donald Trump will pursue
policies that boost inflation.

 (Additional reporting by Fergal Smith; Editing by Lisa Shumaker
and Cynthia Osterman)

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