CANADA FX DEBT-C$ gains on weaker greenback as oil fights back

Mon Dec 1, 2014 4:49pm EST
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(Updates with fresh comments, details and closing figure)
    * Canadian dollar at C$1.1328 or 88.28 U.S. cents
    * Bond prices mostly lower across the maturity curve

    By Solarina Ho
    TORONTO, Dec 1 (Reuters) - The Canadian dollar jumped more
than a cent against its U.S. counterpart on Monday as oil prices
recovered some of their recent heavy losses and allowed the
currency to regain all the ground it lost on Friday.
    Canada is a major oil exporter and its currency is exposed
to crude prices, which have fallen for five straight months.
Prices sank to new five-year lows early on Monday following
OPEC's decision last week not to cut crude production, but they
then rebounded with their biggest daily gain since 2012.
    "We've had oil come well off its lows, having reached brand
new lows this morning and then retraced more half of its losses
from Friday," said Camilla Sutton, chief currency strategist at
    "From its low today to where it's closing, oil is up a
substantial 9 percent. So it's had a very big day. On the back
of that CAD's done very well ... and able to retrace a lot of
those earlier losses."
    The Canadian dollar was at C$1.1328 to the
greenback, or 88.28 U.S. cents, much stronger than Friday's
finish of C$1.1440, or 87.41 U.S. cents.
    Earlier in the session, it touched C$1.1459, or 87.27 U.S.
cents, just shy of the C$1.1466 it hit more than three weeks
ago, which was the currency's weakest level since July 2009.
    With oil prices still an overall drag, however, the Canadian
dollar is expected to remain under pressure.
    "If anything, what last week's price action should be
telling the market, especially for U.S. dollar buyers, is that
there's more weakness ahead for the loonie," said Brad Schruder,
director of foreign exchange sales at BMO Capital Markets.
    This week, investor attention will turn to a slew of central
bank decisions around the world, including a Bank of Canada
policy statement on Wednesday. There is also some key economic
data, culminating in U.S. and Canadian labor market figures for
November on Friday. 
    "It's an extremely busy week with plenty to chew on as far
as direction from central banks and economic underpinnings," 
Schruder said.
    Canadian government bond prices were mostly lower across the
maturity curve, with the two-year down 1 Canadian
cent to yield 0.989 percent and the benchmark 10-year
 off 44 Canadian cents to yield 1.896 percent.

 (Reporting by Solarina Ho; Editing by Meredith Mazzilli; and
Peter Galloway)