CANADA FX DEBT-C$ weakens as oil seesaws; losses pared after U.S. data

Thu Apr 14, 2016 10:13am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* Canadian dollar at C$1.2833, or 77.92 U.S. cents
    * Bond prices lower across the maturity curve

    TORONTO, April 14 (Reuters) - The Canadian dollar weakened
slightly against its U.S. counterpart on Thursday as oil prices
seesawed, although some losses were pared after
tamer-than-expected U.S. inflation data.
    Gains for the U.S. dollar against a basket of
currencies were mostly undone after data showed U.S. consumer
prices rose less than expected in March and underlying inflation
slowed, suggesting the Federal Reserve will remain cautious
about raising interest rates this year. 
    U.S. crude was unchanged at $41.76 a barrel after the
International Energy Agency trimmed its forecast for demand
growth but said a fall in oil output in the United States was
speeding up.    
    The loonie hit a nearly nine-month high at C$1.2744 on
Wednesday but closed lower on the day after the Bank of Canada
counseled caution on the outlook for economic growth.
    The central bank warned that the country's improving economy
faced downside risks, including a stronger currency that could
drag on non-commodity exports, although it held interest rates
steady and raised growth forecasts. 
    Still, the implied probability of a Bank of Canada rate cut
this year has dropped to less than 10 percent from more than 50
percent at the start of March. 
    At 9:46 a.m. EDT (1346 GMT), the Canadian dollar 
was trading at C$1.2833 to the greenback, or 77.92 U.S. cents,
slightly weaker than Wednesday's close of C$1.2815, or 78.03
U.S. cents.
    The currency's strongest level of the session was C$1.2782,
while its weakest was C$1.2897.    
    The loonie has rebounded 14.5 percent since hitting a
12-year low of C$1.4689 in January.
    New home prices in Canada rose by 0.2 percent in February
from January, pushed up by continuing strength in the major
regions of Toronto and Vancouver, Statistics Canada said.
    
    Canadian government bond prices were lower across the
maturity curve, with the two-year price down 3
Canadian cents to yield 0.589 percent and the benchmark 10-year
 falling 35 Canadian cents to yield 1.288 percent.
    The spread between the 2-year and 10-year yields widened by
2.3 basis points to 69.9 basis points, indicating
underperformance for longer-dated maturities.

 (Reporting by Fergal Smith; Editing by Lisa Von Ahn)