January 21, 2019 / 3:06 PM / 6 months ago

CANADA FX DEBT-C$ weakens as data show slower growth in China

    * Canadian dollar weakens 0.3 percent against the greenback
    * Canadian bond prices rise across a flatter yield curve
    * Price of U.S. oil rises 0.5 percent

    TORONTO, Jan 21 (Reuters) - The commodity-linked Canadian
dollar weakened against its U.S. counterpart on Monday after
data showed a slowdown in China's economy and the International
Monetary Fund cut its world economic growth forecasts.
    China's economic growth cooled slightly in the fourth
quarter from a year earlier as expected, weighed down by weak
investment and faltering consumer confidence as Washington piled
on trade pressure, leaving 2018 growth the weakest in 28 years.
            
    The IMF predicted the global economy to grow at 3.5 percent
in 2019 and 3.6 percent in 2020, due to weakness in Europe and
some emerging markets, and said failure to resolve trade
tensions could further destabilize a slowing global economy.
                
    Canada exports many commodities, including oil, so its
economy could be hurt by a slowdown in the global economy.
    U.S. crude oil futures        prices were up 0.5 percent at
$54.05 a barrel but the rally in global equities stalled. U.S.
markets were closed for the Martin Luther King Jr. Day holiday.
                        
    At 9:40 a.m. (1440 GMT), the Canadian dollar          was
trading 0.3 percent lower at 1.3307 to the greenback, or 75.15
U.S. cents, which matched declines for the Australian dollar
       and the New Zealand dollar        as the biggest among
G10 currencies.
    The loonie, which hit a nine-day low last Thursday at
1.3319, traded in a range of 1.3257 to 1.3318.
    The decline for the loonie comes after data on Friday showed
a pick-up in December in Canada's annual inflation rate but
stable underlying price pressures that could forestall
additional interest rate hikes from the Bank of Canada over the
coming months.             
    Canadian manufacturing and wholesale trade data for November
are due on Tuesday. The November retail sales report is due on
Wednesday.
    Canadian government bond prices were higher across a flatter
yield curve, with the two-year            up 1.5 Canadian cents
to yield 1.938 percent and the 10-year             rising 16
Canadian cents to yield 2.018 percent.
    On Friday, the 10-year yield touched its highest intraday in
one month at 2.049 percent.

 (Reporting by Fergal Smith
Editing by Nick Zieminski)
  
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