February 4, 2019 / 2:23 PM / 8 months ago

REFILE-CANADA FX DEBT-C$ pares recent gains as oil price falls, greenback rallies

 (Corrects the headline by changing the word "fall" to "falls")
    * Canadian dollar falls 0.3 percent against the greenback
    * Price of U.S. oil drops 2 percent
    * Canadian bond prices decline across a steeper yield curve

    TORONTO, Feb 4 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Monday, reversing some of last
week's rally, as oil prices fell and the greenback broadly
climbed.
    The U.S. dollar        snapped a two-week losing streak as
Friday's strong U.S. jobs data fueled demand just days after the
Federal Reserve expressed caution about further interest rate
hikes this year.             
    The price of oil, one of Canada's major exports, pulled back
from an earlier two-month high as forecasts of weaker demand and
an economic slowdown offset OPEC-led supply cuts and U.S.
sanctions against Venezuela's petroleum industry.             
    U.S. crude        prices were down 2 percent at $54.14 a
barrel.
    At 9:13 a.m. (1413 GMT), the Canadian dollar          was
trading 0.3 percent lower at 1.3134 to the greenback, or 76.14
U.S. cents. The currency, which on Friday touched its strongest
intraday in nearly three months at 1.3069, traded in a range of
1.3086 to 1.3138.
    The loonie rose 0.9 percent last week as hopes of progress
on trade talks between the United States and China offset data
showing that Canada's economy contracted in November. Canada's
jobs report for January is due on Friday.
    Data last Friday from the U.S. Commodity Futures Trading
Commission, which had been delayed during a partial shutdown of
the U.S. government, and Reuters calculations showed that
speculators raised their bearish bets on the Canadian dollar in
December to the highest in about five months.
    As of Dec. 24, net short positions had jumped to 44,692
contracts from 7,457 a week earlier.             
    Canadian government bond prices were lower across the yield
curve on Monday in sympathy with U.S. Treasuries. The 10-year
            declined 5 Canadian cents to yield 1.964 percent.
    The gap between Canada's 2- and 10-year yields grew by 0.4
basis points to a spread of 12.7 basis points, its widest since
Nov. 21.

 (Reporting by Fergal Smith; Editing by David Gregorio)
  
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