January 29, 2019 / 3:05 PM / 2 months ago

CANADA FX DEBT-C$ steadies as higher oil prices offset U.S.-China tensions

    * Canadian dollar trades near flat against the greenback
    * Price of U.S. oil rises 2.8 percent
    * Canadian bond prices dip across the yield curve

    TORONTO, Jan 29 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Tuesday as higher oil
prices offset increased uncertainty over trade talks this week
between the United States and China.
    U.S. officials announced criminal charges against China's
Huawei Technologies Co Ltd          that could upset the
U.S.-China talks, which are part of negotiations intended to
walk back trade tensions between the world's two largest
economies.             
    Canada is running a current account deficit and exports many
commodities, including oil, so its economy could be hurt by a
reduction in the global flow of trade or capital.
    The price of oil, one of Canada's major exports, rose after
Washington imposed sanctions on Venezuelan state-owned oil firm
PDVSA in a move that may curb the OPEC member's crude exports.
U.S. crude oil futures        were up 2.8 percent at $53.42 a
barrel.             
    At 9:44 a.m. (1444 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3259 to the greenback, or 75.42
U.S. cents. The currency, which on Monday touched its strongest
intraday in more than two weeks at 1.3204, traded in a range of
1.3246 to 1.3278.
    The steady profile for the loonie came as foreign exchange
traders awaited crucial parliamentary votes in Britain later in
the day that are aimed at breaking the Brexit deadlock. The
currency market could also take its cue this week from
Wednesday's interest rate decision by the U.S. Federal Reserve.
            
    The Fed is expected to acknowledge growing risks to the U.S.
economy as global momentum weakens.
    Canadian government bond prices edged lower across the yield
curve, with the two-year            price down 1 Canadian cent
to yield 1.879 percent and the 10-year             falling 2
Canadian cents to yield 1.966 percent.
    Canada's gross domestic product data for November is due on
Thursday.   

 (Reporting by Fergal Smith
Editing by Frances Kerry)
  
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