CANADA FX DEBT-C$ notches 4-week high as oil rallies, greenback eases

Wed Jan 11, 2017 4:37pm EST
 
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(Updates prices to close)
    * Canadian dollar ends at C$1.3177, or 75.89 U.S. cents
    * Loonie touches its strongest since Dec. 14 at C$1.3119
    * Bond prices mixed across the yield curve

    By Fergal Smith
    TORONTO, Jan 11 (Reuters) - The Canadian dollar strengthened
to a four-week high against its U.S. counterpart on Wednesday as
oil rallied and the greenback fell against a basket of major
currencies following a news conference by U.S. President-elect
Donald Trump.
    The Canadian dollar settled at C$1.3177 to the
greenback, or 75.89 U.S. cents, stronger than Tuesday's close of
C$1.3227, or 75.60 U.S. cents.
    "It's potentially a watershed day for the Canadian dollar
because it has broken below the trendline since May ... and that
may signal big things for the Canadian dollar ahead," said Adam
Button, currency analyst at ForexLive.
    "To start the year there has been an incredible battle in
Canadian dollar trading between oil, which has been declining,
and Canadian economic news which has been sparkling. And with
oil bouncing back today it has cleared the way for an extended
Canadian dollar rally," Button said.
    Domestic economic data released since the beginning of the
year has shown a surge in jobs in December and the first trade
surplus in more than two years in November while a Bank of
Canada survey pointed to improving business conditions.
  
    The loonie's weakest level of the session was C$1.3295,
while it touched its strongest since Dec. 14 at C$1.3119.    
    Prices of oil, one of Canada's major exports, rose by the
most in over a month, helped by news that Saudi Arabia had cut
exports to Asia and a weaker U.S. dollar following
Trump's news conference.    
    Trump denounced unsubstantiated claims he had been caught in
a compromising position during an earlier visit to Russia and
attacked U.S. intelligence agencies over the leak of the
information. 
    Trump also "didn't hint at any measures to stimulate
near-term growth and that's a disappointment," Button said.
    Canadian government bond prices were mixed across the yield
curve, with the two-year price down half a Canadian
cent to yield 0.755 percent and the 10-year rising 4
Canadian cents to yield 1.677 percent.

 (Additional reporting by Alastair Sharp, editing by G Crosse)