October 15, 2019 / 3:37 PM / a month ago

Loonie gains as IMF sticks to its Canadian growth forecast

TORONTO (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Tuesday as U.S. stocks rose and the IMF left its 2019 growth projection for Canada unchanged.

FILE PHOTO: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. REUTERS/Mark Blinch

Wall Street advanced as upbeat earnings reports from JPMorgan Chase, UnitedHealth and Johnson & Johnson allayed concerns about the fallout from a prolonged U.S.-China trade war on corporate America.

Canada runs a current account deficit so its economy could benefit from a pick-up in the global flow of capital.

The International Monetary Fund cut its global growth forecast for 2019 to 3%, its lowest level since the global financial crisis, but its projection for Canada was unchanged from its previous forecast in July at 1.5%.

Oil prices fell for a second straight day amid U.S.-China trade talks which have investors on edge. U.S. crude oil futures CLc1 were down 0.2% at $53.48 a barrel.

At 10:38 a.m. (1438 GMT), the Canadian dollar CAD=D4 was trading 0.2% higher at 1.3209 to the greenback, or 75.71 U.S. cents.

The currency, which last Friday notched a one-month high at 1.3171 after data showing a much bigger-than-expected domestic jobs gain, traded in a range of 1.3207 to 1.3238.

Canada’s inflation report for September, due on Wednesday, could help guide expectations for the Bank of Canada policy outlook. The central bank, which has left interest rates on hold this year even as some of its major peers have eased, is due to make its next rate decision on Oct. 30.

Canadian government bond prices were mixed across a flatter yield curve, with the two-year CA2YT=RR down 0.6 Canadian cents to yield 1.657% and the 10-year CA10YT=RR rising 19 Canadian cents to yield 1.499%.

Last Friday, the 10-year yield touched its highest intraday level since July 18 at 1.545%.

Reporting by Fergal Smith; Editing by David Gregorio

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