June 27, 2018 / 10:11 PM / 3 months ago

CANADA FX DEBT-C$ pares losses as July rate hike odds oscillate near 50 pct

 (Adds economist quote and details on activity, updates prices)
    * Canadian dollar at C$1.3336, or 74.99 U.S. cents
    * Price of U.S. oil rises 3.2 percent
    * Bond prices rise across the yield curve

    By Fergal Smith
    TORONTO, June 27 (Reuters) - The Canadian dollar weakened to
a one-year low against its U.S. counterpart on Wednesday before
paring some losses as remarks by Bank of Canada Governor Stephen
Poloz left investors guessing about prospects for an interest
rate hike next month.
    At 5 p.m. EDT (2100 GMT), the Canadian dollar          was
trading 0.2 percent lower at C$1.3336 to the greenback, or 74.99
U.S. cents.
    The currency touched its weakest intraday since June 12,
2017 at C$1.3386.
    The effects of U.S. steel and aluminum tariffs and tighter
mortgage rules will "figure prominently" in the Bank of Canada's
July decision on interest rates, Poloz said in a speech, before
making clear in a press conference that an interest rate hike is
still on the table for July.              
    "The speech left investors with a sense that Governor Poloz
is on the fence about the upcoming rate decision," said Royce
Mendes, senior economist at CIBC Capital Markets. "He made
references to the Bank of Canada being particularly data
dependent right now."        
    Chances of a rate hike at the July 11 announcement initially
fell to less than 50 percent but then recovered to match the
level before the speech at 55 percent, data from the overnight
index swaps market showed.
    Canada's gross domestic product data for April and the Bank
of Canada Business Outlook Survey are due on Friday.
    The price of oil, one of Canada's major exports, was
supported by U.S. demands that importers stop buying Iranian
crude from November. U.S. crude        prices settled 3.2
percent higher at $72.76 a barrel.             
    Some of the benefit of higher prices, however, could be lost
for Canada due to a supply outage at the Syncrude oil sands
facility in Alberta, with repairs expected to last at least
through July.             
    U.S. stocks fell on renewed uncertainty regarding the U.S.
stance on Chinese investments in American technology companies.
             
    Canada runs a current account deficit so its economy could
be hurt if the flow of trade or capital slows.
    The country also has its own trade dispute with the United
States and is in slow-moving talks to revamp the North American
Free Trade Agreement.
    Canadian government bond prices were mixed across the yield
curve, with the 10-year             rising 10 Canadian cents to
yield 2.094 percent.
    The 10-year yield touched its lowest intraday since Jan. 4
at 2.056 percent.

 (Reporting by Fergal Smith
Editing by Chris Reese)
  
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