December 11, 2017 / 9:32 PM / in 4 months

CANADA FX DEBT-C$ near flat ahead of Fed decision, Poloz speech

 (Adds analyst quotes and background details; updates prices)
    * Canadian dollar at C$1.2856, or 77.78 U.S. cents
    * Bank of Canada Governor Poloz due to speak on Thursday
    * Bond prices lower across much of a flatter yield curve

    By Fergal Smith
    TORONTO, Dec 11 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Monday as investors
awaited this week's Federal Reserve interest rate decision and a
speech by Bank of Canada Governor Stephen Poloz.
    The Canadian currency lost 1.3 percent last week after the
central bank struck a more dovish tone than investors had
expected as it left its benchmark interest rate steady at 1
percent.             
    Poloz will discuss on Thursday the issues that keep him
awake at night.
     "He will probably remain a little bit cautionary," said
Lennon Sweeting, chief market strategist at XE. "I don't think
the Bank of Canada is in a position right now to be sharpening
up policy too much."
    The central bank is worried about a number of uncertainties
that could impact Canada's economy, including renegotiation of
the North American Free Trade Agreement.         
    NAFTA negotiators convene in Washington next week for a
limited round of talks unlikely to move the needle on major
sticking points but aimed at demonstrating some progress toward
closing easier chapters.            
    "I think we might see more heightened volatility as the week
moves on and NAFTA headlines may prove to play more part in
that," Sweeting said.
    The Fed is widely expected to raise interest rates at its
two-day policy meeting that ends on Wednesday, and is seen
possibly tightening rates two or three times in 2018.
            
    At 4 p.m. ET (2100 GMT), the Canadian dollar          was
little changed at C$1.2856 to the greenback, or 77.78 U.S.
cents.
    The currency traded in a narrow range of C$1.2832 to
C$1.2868. On Friday, it touched its weakest level in a week, at
C$1.2880.
    Speculators have trimmed bullish bets on the Canadian
dollar, data from the U.S. Commodity Futures Trading Commission
and Reuters calculations showed on Friday.                 
    The price of oil, one of Canada's major exports, rose after
a North Sea pipeline was shut for repairs, while investors
focused on commodities following an explosion in New York that
the city's mayor called an attempted terrorist attack.
                        
    U.S. crude oil futures        settled 1.1 percent higher at
$57.99 a barrel.
    Canadian government bond prices were lower across much of a
flatter yield curve, with the two-year            down 1.5
Canadian cents to yield 1.512 percent and the 10-year
            falling 1 Canadian cent to yield 1.862 percent.
    The gap between Canada's two-year yield and its U.S.
equivalent widened by 1.5 basis points to a spread of -31.1
basis points.

 (Reporting by Fergal Smith; Editing by Bill Trott and Leslie
Adler)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below