CANADA FX DEBT-C$ falls amid lower oil prices, selloff in risky assets

Thu Feb 11, 2016 9:58am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* Canadian dollar at C$1.3972 or 71.57 U.S. cents
    * Bond prices higher across the maturity curve
    * Canada 10-year yield at record low of 0.921 percent

    TORONTO, Feb 11 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Thursday as a drop in crude oil
prices and selloff in global stocks weighed on the
risk-sensitive commodity-linked currency.
    Losses against safe-haven currencies such as the Japanese
yen and the Swiss franc were deeper. Federal Reserve Chair Janet
Yellen on Wednesday highlighted the growing risks that face the
U.S. economy. 
    A renewed slump in banking and mining stocks weighed on
European markets. Markets have worried this week that negative
rates have hit banks' ability to earn margins on interest rates.
    Oil slid 2 percent, dented by record U.S. crude
inventories, worries about the demand outlook and a Goldman
Sachs forecast that prices would remain low and volatile until
the second half of the year. 
    At 9:31 a.m. EST (1431 GMT), the Canadian dollar 
was trading at C$1.3972 to the greenback, or 71.57 U.S. cents,
weaker than the Bank of Canada's official close of C$1.3933, or
71.77 U.S. cents, on Wednesday.
    The currency's strongest level of the session was C$1.3884,
while its weakest was C$1.4013.
    Against the yen, the Canadian dollar touched its lowest
since Jan. 20 at 79.27 yen.    
    Domestic data had little impact.
    New home prices edged up 0.1 percent in December from
November, a smaller increase than expected. Compared with
December 2014, prices grew by 1.6 percent. 
    Canada's job vacancy rate fell to 2.6 percent in the third
quarter, down from 2.8 percent in the second quarter.
    Canadian government bond prices were higher across the
maturity curve on the flight to safety.
    The two-year price rose 4 Canadian cents to yield
0.335 percent and the benchmark 10-year was up 19
Canadian cents to yield 0.979 percent.
    The 10-year yield hit a new record low at 0.921 percent
after having dropped below 1 percent for the first time ever on
    The Canada-U.S. two-year bond spread was 5.1 basis points
less negative at -29.5 basis points, while the 10-year spread
was 7.8 basis points less negative at -63.1 basis points as
Treasuries outperformed.
    The Canadian government is talking to the country's largest
pension funds about investing in billions of dollars worth of
infrastructure projects to help stimulate the economy, the
Infrastructure Ministry told Reuters on Wednesday. 

 (Reporting by Fergal Smith; Editing by Bernadette Baum)