July 26, 2018 / 7:44 PM / 4 months ago

CANADA FX DEBT-C$ dips, consolidating gains linked to trade optimism

 (Adds dealer quotes and details on activity; updates prices)
    * Canadian dollar at C$1.3072, or 76.50 U.S. cents
    * Price of U.S. oil rises 0.5 percent
    * Bond prices higher across the yield curve
    * Canada-U.S. 10-year spread widens by 5.1 basis points

    By Fergal Smith
    TORONTO, July 26 (Reuters) - The Canadian dollar edged lower
against the greenback on Thursday as the loonie pared gains from
the previous session driven by trade optimism and data pointed
to solid U.S. business spending.    
    The U.S. dollar        climbed against a basket of major
currencies after data showed new orders for key U.S.-made
capital goods increased more than expected in June and the
European Central Bank signaled no change in its timetable to
move away from its ultra-low rate policy.             
    At 3:21 p.m. EDT (1921 GMT), the Canadian dollar         
was trading 0.2 percent lower at C$1.3072 to the greenback, or
76.50 U.S. cents.
    On Wednesday, the currency touched its strongest in nearly
six weeks at C$1.3025 after Canadian and Mexican policymakers
said they were optimistic about prospects for the North American
Free Trade Agreement and a breakthrough in U.S.-EU trade talks.
                        
    Canada runs a current account deficit, so its economy could
be hurt if the flow of trade or capital slows.
    "I am anticipating a little bit more Canadian dollar
appreciation on the short-term horizon," said Brad Schruder,
director of corporate sales and structuring at BMO Capital
Markets. "I think that it will be driven mostly by investors who
have been long U.S. dollars for some time."
    Bearish bets on the Canadian dollar are near the most since
June 2017, data from the U.S. Commodity Futures Trading
Commission and Reuters calculations have shown.                 
    The loonie touched the C$1.3025 level again on Thursday,
while its weakest was C$1.3093.
    U.S. crude oil futures        settled 0.5 percent higher at
$69.61 a barrel as Saudi Arabia suspended its oil shipments
through a Red Sea strait in response to an attack on two of the
country's tankers.             
    Oil is one of Canada's major exports.
    Canadian government bond prices were higher across the yield
curve, with the two-year            up 2 Canadian cents to yield
2.05 percent and the 10-year             rising 10 Canadian
cents to yield 2.285 percent.
    The gap between Canada's 10-year yield and its U.S.
equivalent widened 5.1 basis points to a spread of 69.1 basis
points in favor of the U.S. bond.

 (Reporting by Fergal Smith; Editing by Bernadette Baum and Dan
Grebler)
  
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