November 9, 2017 / 10:18 PM / 3 years ago

CANADA FX DEBT-C$ hits 2-week high as greenback hurt by U.S. tax worries

    * Canadian dollar at C$1.2677, or 78.88 U.S. cents
    * Loonie touches its strongest in two weeks
    * Bond prices mostly retreat across the yield curve

 (Updates figures, adds strategist comments)
    By Solarina Ho
    TORONTO, Nov 9 (Reuters) - The Canadian dollar strengthened
on Thursday to a two-week high against a broadly weaker U.S.
dollar, which came under pressure as investors worried about a
delay on corporate tax cuts.
    The U.S. dollar        edged lower against a basket of major
currencies as Senate Republicans were set to announce a tax cut
plan that would push back reducing the corporate tax to 20
percent from 35 percent until 2019.             
    "It's more really disappointment on the U.S. dollar today,"
said Amo Sahota, director at Klarity FX in San Francisco.
    "Equities ... got floored by the Senate's tax reform.
Treasuries are off a little bit as well. All this has kind of
weighed on USD/CAD."
    At 4:00 p.m. ET (2100 GMT), the Canadian dollar          was
up 0.4 percent at C$1.2677 to the greenback, or 78.88 U.S.
    The currency's weakest level of the session was C$1.2740,
while it touched its strongest since Oct. 25 at C$1.2668.
    "The one we're watching really closely is oil and
commodities in general," said Sahota.
    Prices of oil, one of Canada's major exports, were supported
by major exporter supply cuts and concern about political
uncertainty in Saudi Arabia, but analysts said the market could
be vulnerable to a sell-off after several months of gains.
    U.S. crude        settled at $57.17 a barrel, up 0.63
    The loonie added to gains it made after comments on Tuesday
by Bank of Canada Governor Poloz.
    Poloz maintained a neutral tone on the next interest rate
move in a speech and press conference, repeating the central
bank's message that it was monitoring wage growth and inflation,
as well as how the economy was adjusting to the two rate hikes
in July and September.             
    New home prices in Canada rose 0.2 percent in September from
August, mostly on the strength of the Kelowna and Vancouver
markets, Statistics Canada said on Thursday. The year-on-year
gain was steady at 3.8 percent.             
    Canadian government bond prices were mostly lower across the
yield curve in sympathy with U.S. Treasuries. The two-year
           was down 5 Canadian cents to yield 1.452 percent, and
the 10-year             declined 15 Canadian cents to yield
1.937 percent.

 (Reporting by Fergal Smith and Solarina Ho; Editing by Lisa Von
Ahn and Tom Brown)
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