CANADA FX DEBT-C$ hits a 6-week low amid weaker commodities, soft data

Thu May 19, 2016 9:47am EDT
 
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* Canadian dollar at C$1.3139, or 76.11 U.S. cents
    * Bond prices mixed across the maturity curve

    TORONTO, May 19 (Reuters) - The Canadian dollar weakened to
a fresh six-week low against its broadly firmer U.S. counterpart
on Thursday as Federal Reserve interest rate hike speculation
weighed on commodity markets, while domestic data was weaker
than expected.
    The U.S. dollar rose against a basket of major currencies,
supported by a perceived increase in chances of a rise in U.S.
interest rates by September after hawkish Fed minutes on
Wednesday.  
    Oil prices fell, pressured by a stronger dollar and as a
surprise increase in U.S. crude inventories suggested supply
remains ample despite output problems. U.S. crude prices
were down 1.76 percent to $47.34 a barrel. 
    The value of Canadian wholesale trade dropped by a
deeper-than-expected 1.0 percent in March, pulled down in part
by weaker sales in the motor vehicles and parts subsector,
Statistics Canada said. In volume terms, the drop in sales was
less pronounced at 0.4 percent. 
    At 9:19 a.m. EDT (1319 GMT), the Canadian dollar 
was trading at C$1.3139 to the greenback, or 76.11 U.S. cents,
much weaker than Wednesday's close of C$1.3023, or 76.79 U.S.
cents.
    The currency's strongest level of the session was C$1.3012,
while it hit its weakest since April 8 of C$1.3155.
    Firefighters battling a wildfire that has threatened oil
sands facilities north of Fort McMurray, Alberta looked to
cooler weather and the promise of rain on Thursday. The fire has
surged north of Fort McMurray this week, forcing the evacuation
of 8,000 oil sand workers and prolonging a shutdown that has cut
Canadian oil output by a million barrels a day. 
    Canadian government bond prices were mixed across the
maturity curve, with the two-year price flat to yield
0.64 percent and the benchmark 10-year falling 1
Canadian cent to yield 1.369 percent.
    The 10-year yield touched its highest since May 5 of 1.394
percent.
    Investors are awaiting Canada's March retail sales data and
April inflation data, set for release on Friday. 

 (Reporting by Fergal Smith; Editing by Bernadette Baum)