December 16, 2016 / 9:57 PM / a year ago

CANADA FX DEBT-C$ steadies as oil rises; ends week 1.2 pct lower

(Adds analyst quotes and details throughout and updates prices)
    * Canadian dollar ends at C$1.3344, or 74.94 U.S. cents
    * Bond prices mixed across steeper yield curve
    * 30-year yield touches its highest since November 2015

    By Fergal Smith
    TORONTO, Dec 16 (Reuters) - The Canadian dollar steadied
against its U.S. counterpart on Friday as oil rose and investors
took stock of sharp losses for the currency over the previous
two days after the Federal Reserve raised interest rates.
    For the week, the loonie fell 1.2 percent. It slumped from
its strongest level in eight weeks at C$1.3081 per U.S. dollar
before the Fed decision on Wednesday to hit its weakest in two
weeks at C$1.3417 on Thursday.
    U.S. crude oil futures settled up $1 at $51.90 a
barrel after Goldman Sachs boosted its price forecast for 2017
and producers showed signs of adhering to a global deal to
reduce output. 
    Oil is one of Canada's major exports.
    Investors who sold Canadian dollars have been "taking some
chips off the table ahead of the weekend as liquidity conditions
begin to dry up into the holidays," said Mazen Issa, senior
foreign exchange strategist at TD Securities.   
    The Canadian dollar ended at C$1.3344 to the
greenback, or 74.94 U.S. cents, slightly stronger than
Thursday's close of C$1.3347, or 74.92 U.S. cents.
    The currency's strongest level of the session was C$1.3320,
while its weakest was C$1.3392.
    "It is still a (U.S.) dollar stronger environment until
proven otherwise" after the Fed signaled interest rate increases
would follow at a faster pace next year, Issa said.
    He expects the loonie to weaken to C$1.3650 per U.S. dollar.
   
    Speculators raised bearish bets on the Canadian dollar to
the most since March, according to Commodity Futures Trading
Commission data and Reuters calculations. Net short Canadian
dollar positions rose to 21,869 contracts as of Dec. 13 from
18,158 a week earlier.
    Canadian government bond prices were mixed across a steeper
yield curve. The two-year rose 1 Canadian cent to
yield 0.819 percent, while the 30-year fell 32
Canadian cents to yield 2.425 percent.
    The 30-year yield touched its highest intraday since
November 2015 at 2.438 percent.
    Foreigners maintained their healthy appetite for Canadian
securities in October, snapping up C$15.75 billion worth of
bonds, stocks and money market paper, Statistics Canada said.
 

 (Reporting by Fergal Smith; Editing by Paul Simao and Meredith
Mazzilli)

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