CANADA FX DEBT-C$ firms as risk appetite improves

Thu Aug 4, 2016 9:13am EDT
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* Canadian dollar at C$1.3062, or 76.56 U.S. cents
    * Bond prices higher across flatter maturity curve

    TORONTO, Aug 4 (Reuters) - The risk-sensitive Canadian
dollar edged higher against its U.S. counterpart on Thursday
after monetary policy easing by the Bank of England helped
support stocks, offsetting a dip in oil prices.
    U.S. stock index futures were slightly higher and European
shares advanced after the Bank of England cut interest rates for
the first time since 2009 and revived its bond-buying program.
    Oil prices slipped after gains made earlier on Thursday and
the previous day as overproduction and large volumes of unsold
crude and ample refined products around the world weighed on
markets. U.S. crude prices were down 0.32 percent to
$40.7 a barrel. 
    At 8:56 a.m. EDT (1256 GMT), the Canadian dollar 
was trading at C$1.3062 to the greenback, or 76.56 U.S. cents,
slightly stronger than Wednesday's close of C$1.3071, or 76.51
U.S. cents.
    The currency's strongest level of the session was C$1.3039,
while its weakest was C$1.3089.
    Traders were braced for U.S. monthly jobs data due to be
released on Friday, which may shift expectations for U.S.
interest rates. Canada's international trade data for June and
employment report for July are also awaited on Friday. 
    Canadian government bond prices were higher across the
maturity curve in sympathy with U.S. Treasuries and British
government bonds. The two-year price firmed 1
Canadian cent to yield 0.553 percent and the benchmark 10-year
 climbed 21 Canadian cents to yield 1.076 percent.
    The curve flattened as the spread between the 2-year and
10-year yields narrowed by 1.7 basis points to 52.3 basis
points, indicating outperformance for longer-dated maturities.

 (Reporting by Fergal Smith)