April 20, 2017 / 8:54 PM / 3 years ago

CANADA FX DEBT-C$ recovers modestly from six-week low versus greenback

    * Canadian dollar at C$1.3472, or 74.31 U.S. cents
    * Bond prices lower across the maturity curve

 (Adds details, quote, updates prices)
    TORONTO/OTTAWA, April 20 (Reuters) - The Canadian dollar
strengthened modestly against the greenback on Thursday,
recovering from a nearly six-week low, though it was expected to
remain on the ropes in the longer term as monetary policy in
Canada and the United States diverge.
    The small gain came after two sessions of losses, while oil
prices ended the day mixed as rising U.S. production was
tempered by geopolitical uncertainty.      
    U.S. crude oil futures        ended down 17 cents at $50.27
a barrel, though Brent         was up 6 cents to $52.99 a
    A weak U.S. dollar also helped the loonie, but the greenback
likely still has some upward momentum to it, given the
strengthening U.S. economy and anticipated interest rate hikes
from the Federal Reserve, said Rahim Madhavji, president at
    With the Bank of Canada staying on the sidelines and oil
prices relatively weak, the Canadian dollar could grind lower to
C$1.36, said Madhavji.
    "The saving hope for the loonie is either oil or the Bank of
Canada and neither of them seem to be enforcing themselves at
this time."
    The Canadian dollar          finished at C$1.3472 to the
greenback, or 74.31 U.S. cents, slightly stronger than
Wednesday's close of C$1.3480, or 74.18 U.S. cents.
    It traded in a tight range between C$1.3500 and C$1.3457,
after changing hands in the C$1.33 range earlier in the week.
    Investors were turning their attention to inflation data due
at 8:30 a.m. ET (1230 GMT) on Friday for further signs that the
country's economy is picking up. Economists polled by Reuters
expect the annual inflation rate cooled to 1.8 percent in March.
    Canadian government bond prices were lower across the
maturity curve, with the two-year            price down 2
Canadian cents to yield 0.734 percent and the benchmark 10-year
            off 13 Canadian cents to yield 1.481 percent.
    The Canada-U.S. two-year bond spread was slightly narrower
at -45.9 basis points, while the 10-year spread was also tighter
at -75.5 basis points.

 (Reporting by Alastair Sharp in Toronto and Leah Schnurr in
Ottawa; Editing by Chizu Nomiyama)
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