CANADA FX DEBT-C$ follows crude prices lower

Mon Nov 17, 2014 5:20pm EST
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(Updates with details, comment, and closing figures)
    * Canadian dollar at C$1.1296, or 88.53 U.S. cents
    * Bond prices higher across the maturity curve

    By Solarina Ho
    TORONTO, Nov 17 (Reuters) - The Canadian dollar eased
against its U.S. counterpart on Monday, tracking weaker oil
prices, while the market awaited the midweek release of the
minutes of the U.S. Federal Reserve Board's last policy meeting.
    The commodities-linked Canadian dollar has been pivoting
around the C$1.13 level in recent sessions, often taking
direction from the price of crude, a major Canadian export. Oil
prices have dropped to four-year lows on concerns about an oil
glut amid signs of slowing global growth.
    Brent and U.S. crude prices finished lower on Monday
following news that Japan, the world's fourth-biggest crude
importer, had slipped into recession.
    "The $1.13 (level) has acted like a very good magnet ...
Just in the absence of any fresh economic indicator to really
drive direction one way or the other," said Scott Smith, senior
market analyst at Cambridge Mercantile Group in Calgary.
    The Canadian dollar closed Monday's session at
C$1.1296 to the U.S. dollar, or 88.53 U.S. cents, weaker than
Friday's finish of C$1.1277, or 88.68 U.S. cents.
    Smith said he expects the loonie to trade between C$1.1275
and C$1.1350 in the short term. Market participants will likely
keep to the sidelines until the Fed minutes are released on
Wednesday, he said. In Canada, the next major economic news will
be CPI data, due on Friday.
    There was some lower tier economic data on Monday: foreign
investment in Canadian securities fell by more than half in
September from August and sales of existing homes in Canada
edged higher in October from September. But the figures did not
have measurable impact on the loonie.
    Currency watchers have noted the Canadian dollar has 
performed reasonably well against the greenback relative to
other currencies.
    "Generally the data's been quite good in Canada, so I think
that has allowed the Canadian dollar hold its own against what's
been a very pro-U.S. dollar trend over the past number of
weeks," said Don Mikolich, executive director, foreign exchange
sales, at CIBC World Markets.
    Canadian government bond prices were higher across the
maturity curve, with the two-year bond up half a
Canadian cent, yielding 1.005 percent. The benchmark 10-year
 was up 8 Canadian cents to yield 2.025 percent.

 (Reporting by Solarina Ho Editing by W Simon and Peter