February 19, 2019 / 3:14 PM / 5 months ago

CANADA FX DEBT-C$ dips as investors weigh global trade uncertainty

    * Canadian dollar falls 0.2 percent against the greenback
    * Price of U.S. oil rises 0.4 percent
    * Canadian bond prices edge up across the yield curve

    TORONTO, Feb 19 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Tuesday as an uncertain outlook
for global trade offset the lift from the highest crude oil
prices in nearly three months.
    A new round of talks between the United States and China to
resolve their trade war will take place in Washington on
Tuesday, with follow-up sessions at a higher level later in the
week, the White House said.             
    Meanwhile, a confidential U.S. Commerce Department report
sent to U.S. President Donald Trump over the weekend was widely
expected to clear the way for him to threaten tariffs of up to
25 percent on imported autos and auto parts by designating the
imports a national security threat.
    Canada would be largely spared from auto tariffs under the
new U.S.-Mexico-Canada Agreement on trade.             
    Still, Canada is running a current account deficit and is a
major producer of commodities, including oil, so its economy
could be hurt if the global flow of trade or capital slows.    
    U.S. crude oil futures        rose to their highest since
Nov. 20 last year, up 0.40 percent at $55.81 a barrel, boosted
by lower supplies.             
    At 9:45 a.m. (1445 GMT), the Canadian dollar          was
trading 0.2 percent lower at 1.3271 to the greenback, or 75.35
U.S. cents. The currency traded in a range of 1.3235 to 1.3281.
    The loonie was little changed on Monday, when Canada's stock
and bond markets were closed for the Family Day holiday. Last
week, the loonie rose 0.3 percent.
    Data last Friday from the U.S. Commodity Futures Trading
Commission and Reuters calculations showed that speculators cut
their bearish bets on the Canadian dollar. 
    As of Jan. 22, net short positions had fallen to 56,096
contracts from 59,524 in the prior week. Earlier in January net
short positions were at their highest since June 2017, at 66,002
contracts.
    Canadian government bond prices were higher across the yield
curve, with the two-year            up 1 Canadian cent to yield
1.772 percent and the 10-year             rising 8 Canadian
cents to yield 1.885 percent.

 (Reporting by Fergal Smith; Editing by David Gregorio)
  
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