August 13, 2018 / 1:36 PM / a month ago

CANADA FX DEBT-C$ steadies near 3-week low amid Turkish lira fallout

    * Canadian dollar at C$1.3139, or 76.11 U.S. cents
    * Loonie touches its weakest intraday since July 24 at
C$1.3179
    * Price of U.S. oil falls 0.4 percent
    * Bond prices little changed across the yield curve

    TORONTO, Aug 13 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Monday, bouncing back
from its weakest in nearly three weeks when it was hit early in
the session as fallout from the Turkish lira's crash rippled
through asset markets.
    World markets shuddered as Turkey's worsening currency
crisis persuaded investors to dump equities and emerging markets
and flee to safer assets safe-haven currencies like the
greenback and the Japanese yen. Canada's currency touched its
weakest since July 24 before bouncing back, but its swing was
not as volatile as some others.             
    Canada exports many commodities and runs a current account
deficit so its economy could be hurt if the flow of trade or
capital slows.
    The price of oil, one of Canada's major exports, slipped as
trade tensions and troubled emerging markets dented the outlook
for fuel demand. U.S. crude        prices were down 0.4 percent
at $67.37 a barrel.                 
    At 9:00 a.m. EDT (1300 GMT), the Canadian dollar         
was trading near flat at C$1.3139 to the greenback, or 76.11
U.S. cents.
    The currency, which was buffeted last week by a diplomatic
row between Saudi Arabia and Canada as well as the threat of
emerging market contagion, hit a session low of C$1.3179.
    Talks between the United States and Mexico over the future
of the North American Free Trade Agreement were set to drag into
this week, as auto industry officials said on Friday that new
sticking points had emerged over President Donald Trump's threat
to impose steep automotive tariffs.             
    U.S. President Donald Trump tweeted late on Friday that
Canada "must wait" to rejoin the NAFTA talks. The country sends
about 75 percent of its exports to the United States, so its
economy could be hurt if NAFTA is scrapped as Trump has
threatened.
    On Friday, data showed that Canada unexpectedly added 54,100
jobs in July and the unemployment rate dipped to equal a record
low 5.8 percent. But analysts said the data were weaker than
they appeared and played down talk of another Bank of Canada
interest rate hike next month.           
    Speculators have cut bearish bets on the Canadian dollar for
the fourth straight week, data from the U.S. Commodity Futures
Trading Commission and Reuters calculations showed on Friday.
            
    Canadian government bond prices were little changed across
the yield curve, with the 10-year             rising 1 Canadian
cent to yield 2.301 percent.
    Canada's manufacturing sales data for June is due on
Thursday and the July inflation report is due on Friday.

 (Reporting by Fergal Smith; Editing by David Gregorio)
  
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