January 4, 2019 / 9:05 PM / in a year

CANADA FX DEBT-C$ climbs to 18-day high on oil rally, jobs gain

 (Adds strategist quotes and details on activity, updates
    * Canadian dollar rises 0.7 percent against the greenback
    * For the week, the loonie rises 1.8 percent
    * Canada adds 9,300 jobs in December
    * Price of U.S. oil increases 1.9 percent
    * Canadian bond prices fall across the yield curve

    By Fergal Smith
    TORONTO, Jan 4 (Reuters) - The Canadian dollar strengthened
to its highest in nearly three weeks against the greenback on
Friday as stocks and oil prices climbed and after domestic data
showed further jobs gains, ahead of next week's interest rate
decision by the Bank of Canada.
    At 3:38 p.m. (2038 GMT), the Canadian dollar          was
trading 0.7 percent higher at 1.3399 to the greenback, or 74.63
U.S. cents. The currency touched its strongest level since Dec.
17 at 1.3381.
    For the week, the loonie was up 1.8 percent, its biggest
advance since September.
    "The Canadian dollar has been a strong performer," said
Alfonso Esparza, a senior currency analyst at OANDA. "We have
seen some sort of recovery in oil prices and also the job
numbers were solid. Following the huge November data point we
expected a bit of a slowdown." 
    Canada added 9,300 jobs in December on an increase in
part-time hiring, slightly more than markets had expected after
a record 94,100 jobs were created in the previous month,
Statistics Canada data indicated.             
    Still, money markets expect the Bank of Canada to leave its
benchmark interest rate on hold at 1.75 percent next week and
through the rest of the year. In November, before a sell-off in
stocks and oil prices deepened, the market had expected rates to
rise to about 2.50 percent by the end of 2019.           
    The price of oil, one of Canada's major exports, climbed on
Friday after proposed trade talks between the United States and
China eased some fears about a global economic slowdown. U.S.
crude oil futures        settled 1.9 percent higher at $47.96 a
    Wall Street rebounded after a strong U.S. payrolls report
and remarks from Federal Reserve Chairman Jerome Powell that
suggested the central bank would be flexible with monetary
    Powell's comments pressured the U.S. dollar, which declined
against a basket of major currencies.
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year           
fell 14 Canadian cents to yield 1.842 percent and the 10-year
            declined 82 Canadian cents to yield 1.919 percent.
    On Thursday, the 10-year yield touched its lowest intraday
level in more than 16 months at 1.814 percent.
    Separate data from Statistic Canada showed that Canadian
producer prices fell by 0.8 percent in November from October,
the largest drop in almost two years, thanks largely to cheaper
energy and petroleum products.                           

 (Reporting by Fergal Smith
Editing by Nick Zieminski and Susan Thomas)
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