August 9, 2018 / 7:47 PM / 3 months ago

CANADA FX DEBT-C$ dips ahead of domestic jobs data as greenback broadly rises

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    * Canadian dollar at C$1.3043, or 76.67 U.S. cents
    * Price of U.S. oil falls 0.2 percent
    * Bond prices higher across flatter yield curve

    By Fergal Smith
    TORONTO, Aug 9 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Thursday as oil prices fell and
the greenback broadly rose, while investors turned attention to
Canada's jobs report on Friday.
    At 3:15 p.m. EDT (1915 GMT), the Canadian dollar         
was trading 0.2 percent lower at C$1.3043 to the greenback, or
76.67 U.S. cents. The currency traded in a range of C$1.3001 to
C$1.3064.
    The loonie was buffeted on Wednesday by a diplomatic dispute
between Canada and Saudi Arabia, hitting a two-week low at
C$1.3121. But it recovered as investors decided that potential
Canadian asset sales by Saudi Arabia will have a short-lived
impact on the currency.
    A dispute over human rights in Saudi Arabia will not have
any impact on Saudi oil supplies to Canada, its energy minister
said.             
    "The big headlines on Canada and Saudi Arabia are much more
noise than anything else," said Rahim Madhavji, president of
Knightsbridge Foreign Exchange. "The focus is on the (jobs)
data."
    The July employment report could help guide expectations for
further Bank of Canada interest rate increases after the central
bank hiked rates in July for the fourth time in a year.
    Money markets expect the Bank of Canada to raise its
benchmark interest rate, which is at 1.50 percent, once more by
December.           
    Canada's dollar will rise over the coming year as the Bank
of Canada hikes interest rates and higher oil prices become more
supportive of the currency, a Reuters poll showed, but it will
take a deal on the North American Free Trade Agreement to
trigger bigger gains.             
    Mexico's economy minister said the country needed to finish
bilateral negotiations with the United States, possibly this
week or next, before Canada rejoins talks over a revamped NAFTA.
            
     The U.S. dollar        gained against most major currencies
as investors bet that trade tensions and a strong U.S. economy
would continue to aid the currency.              
    U.S. crude oil futures       , which fell heavily on
Wednesday, settled 0.2 percent lower at $66.81 a barrel. Oil is
one of Canada's major exports.    
    In domestic data, new housing prices rose by 0.1 percent in
June and seasonally adjusted housing starts fell to 206,314 in
July.                         
    Canadian government bond prices were higher across a flatter
yield curve in sympathy with U.S. Treasuries as U.S. data showed
producer prices were unchanged in July.             .
    The 10-year             climbed 19 Canadian cents to yield
2.338 percent.

 (Reporting by Fergal Smith)
  
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