CANADA FX DEBT-Canada dollar little changed as oil stabilizes

Tue Nov 26, 2013 9:43am EST
 
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* C$ at C$1.0550 vs US$, or 94.79  U.S. cents
    * Loonie stabilizes alongside oil prices
    * Bond prices mixed across the curve

    By Leah Schnurr
    TORONTO, Nov 26 (Reuters) - The Canadian dollar was little
changed against the greenback on Tuesday as investors were of
the view that there would be no immediate increase in crude
supplies as a result of the deal to curb Iran's nuclear program
and oil prices stabilized.
    Iran and six world powers struck a deal on Sunday under
which Tehran is to limit its nuclear energy program in exchange
for initial relief from international trade and financial
sanctions. 
    The deal caps Iran's exports at the current level of about 1
million barrels per day. 
    The Canadian dollar touched a more than four-month low 
overnight on Monday following news of the agreement, adding on
to weakness in recent sessions against a backdrop of likely low
interest rates at home for some time.
    But the loonie retraced some of those losses early on
Tuesday, climbing to a session high of C$1.0520 before trading
little changed. Brent crude gained 33 cents to $111.33 a
barrel. U.S. crude futures edged up 4 cents to $94.13.
    "Oil prices really haven't fallen as much as perhaps people
were worried about in the wake of the Iranian deal," said Mark
Chandler, head of Canadian fixed income and currency strategy in
Toronto.
    "That has helped to arrest the recent slide we've had in the
Canadian dollar versus the U.S. dollar."
    The Canadian dollar was at C$1.0550 versus the U.S.
dollar, or 94.79 U.S. cents, a tad weaker than Monday's close of
C$1.0548, or 94.80 U.S. cents. 
    With no domestic economic data on the calendar until the end
of the week, investors were taking in a slew of U.S. reports on
Tuesday.
    Permits for future U.S. home construction rose to their
highest level in nearly 5-1/2 years last month, while home
prices continued to rise in September. 
 
    Trading could be muted heading into the U.S. Thanksgiving
holiday on Thursday but the focus will be on Canada's gross
domestic product report, due on Friday.
    Growth in the third quarter is forecast to pick up to a 2.5
percent annualized rate, though some analysts say growth could
top expectations. 
    "It could be something that is reasonably positive for the
Canadian dollar," said Chandler, who is expecting a reading of
2.8 percent.
    Canadian bond prices were mixed across the maturity curve,
with the two-year bond off 0.7 Canadian cent to yield
1.109 percent, while the benchmark 10-year bond was
up 8 Canadian cents to yield 2.547 percent.