January 17, 2019 / 9:30 PM / 8 months ago

CANADA FX DEBT-C$ hits 9-day low before paring losses on trade optimism

 (Adds dealer quotes and details on activity; updates prices)
    * Canadian dollar falls 0.1 percent against the greenback
    * Loonie touches its weakest since Jan. 8 at 1.3319
    * Price of U.S. oil declines 0.5 percent
    * Canadian bond prices were mixed across a steeper yield
curve

    By Fergal Smith
    TORONTO, Jan 17 (Reuters) - The Canadian dollar weakened to
its lowest in more than one week against the greenback as oil
prices fell, but the currency pared losses as investors weighed
a possible end to the U.S.-China trade war.
    U.S. stocks advanced as a Wall Street Journal report that
the United States was considering lifting tariffs on Chinese
imports eased investor worries.             
    Canada runs a current account deficit and exports many
commodities including oil, so its economy could benefit from
improved global trade.
    Oil was pressured by fears about surging U.S. crude
production and a weakening global economy. U.S. crude oil
futures        settled 0.5 percent lower at $52.07 a barrel.
    At 3:37 p.m. (2037 GMT), the Canadian dollar          was
trading 0.1 percent lower at 1.3272 to the greenback, or 75.35
U.S. cents. The currency touched its lowest since Jan. 8 at
1.3319.
    The loonie had strengthened as much as 3.5 percent since the
beginning of 2019 before giving up some gains in recent days.
    The loonie's rally at the start of the year was "overdone,"
said Scott Lampard, head of global markets at HSBC Bank Canada,
adding that the U.S. Federal Reserve would be more active than
the Bank of Canada in raising interest rates because of the
stronger U.S. economy.
    Canada's economy is clawing its way through a soft patch,
which will delay the next interest rate hike until at least
April, according to economists polled by Reuters who said the
Bank of Canada would be less aggressive in tightening credit
this year.                     
    Canada lost 13,000 jobs in December, driven by hiring
declines in the trade, transportation and utilities and
construction sectors, according to an ADP report released on
Thursday. The November total jobs added was revised up to 74,000
from 39,100, ADP said.                 
    Canada's inflation report for December is due on Friday.
    Canadian government bond prices were mixed across a steeper
yield curve, with the two-year            up 1 Canadian cent to
yield 1.914 percent, and the 10-year             falling 3
Canadian cents to yield 1.999 percent.
    The gap between Canada's 2-year yield and its U.S.
equivalent widened by 3.5 basis points to a spread of 66.2 basis
points in favor of the U.S. bond.

 (Reporting by Fergal Smith
Editing by Nick Zieminski and Richard Chang)
  
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