November 21, 2018 / 2:55 PM / 8 months ago

Canadian dollar firms as oil prices and stocks rebound

TORONTO (Reuters) - The Canadian dollar edged higher against its broadly weaker U.S. counterpart on Wednesday, as a rebound in oil prices and stocks offset domestic data showing a surprise decline in wholesale trade for the month of September.

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

Canadian wholesale trade decreased by 0.5 percent in September from August, as weaker sales in the machinery, equipment and supplies subsector led the decline, Statistics Canada said. Analysts surveyed by Reuters had forecast a 0.3 percent increase.

The price of oil, one of Canada’s major exports, clawed back some of the previous day’s 6 percent plunge, lifted by a report of an unexpected decline in U.S. crude inventories.

U.S. crude CLc1 prices were up 1.7 percent at $54.32 a barrel, while U.S. stock futures bounced after a brutal two-day sell-off pushed the S&P 500 and the Dow Jones Industrial Average into the red for the year.

The U.S. dollar .DXY fell against a basket of major currencies as the euro was boosted by hopes for a compromise in the row over Italy’s budget.

At 9:14 a.m. (1414 GMT), the Canadian dollar CAD=D4 was trading 0.1 percent higher at 1.3288 to the greenback, or 75.26 U.S. cents.

The currency, which touched its weakest level in nearly five months on Tuesday at 1.3318, traded in a range of 1.3271 to 1.3317.

Canadian Prime Minister Justin Trudeau’s government will release a regular fall budget update at about 4 p.m. (2100 GMT). The update comes less than a year before the next national election.

Canada’s inflation report for October and September retail sales data are due on Friday.

Canadian government bond prices were mixed across the yield curve, with the two-year CA2YT=RR down 0.2 Canadian cent to yield 2.217 percent and the 10-year CA10YT=RR rising 1 Canadian cent to yield 2.349 percent.

On Tuesday, the 10-year yield touched its lowest in more than two months at 2.332 percent.

Reporting by Fergal Smith; Editing by Nick Zieminski

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