February 20, 2019 / 10:01 PM / 7 months ago

CANADA FX DEBT-C$ beats G10 peers as oil climbs to highest this year

 (Adds strategist quotes and details on activity, updates
prices)
    * Canadian dollar rises 0.3 percent against the greenback
    * Loonie notches biggest gain among G10 currencies
    * C$ touches its strongest since Feb. 6 at 1.3151
    * Price of U.S. oil rises 1.5 percent
    * Canadian bond prices trade mixed across a steeper yield
curve

    By Fergal Smith
    TORONTO, Feb 20 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Wednesday to its highest in two
weeks, posting the biggest rise among its peers, as oil prices
rallied and ahead of speech on Thursday by Bank of Canada
Governor Stephen Poloz.
    The price of oil, one of Canada's major exports, climbed to
its highest of 2019 on hopes that oil markets will balance later
this year, helped by output cuts from top producers as well as
U.S. sanctions on OPEC members Iran and Venezuela.             
    U.S. crude oil futures        settled 1.5 percent higher at
$56.92 a barrel.
    "As oil goes, so does Canada," said Michael Goshko,
corporate risk manager at Western Union Business Solutions. "The
Canadian dollar is gaining on the back of stronger oil and a
generally weaker U.S. dollar."
    The U.S. dollar gained against the yen        and cut losses
versus the euro        on Wednesday after the Federal Reserve,
in the minutes of its latest policy meeting, said the U.S.
economy and its labor market remained strong. Still, the
greenback has weakened about 0.4 percent this week against a
basket of major currencies       .
    At 4:44 p.m. (2144 GMT), the Canadian dollar          was
trading 0.3 percent higher at 1.3176 to the greenback, or 75.90
U.S. cents, the biggest gain of G10 currencies.
    The currency touched its strongest intraday level since Feb.
6 at 1.3151.
    Gains for the loonie came as Canada's oil-producing province
of Alberta said it has leased 4,400 rail cars in a
multibillion-dollar move to clear a glut of crude that depressed
prices.             
    The Bank of Canada said last month it expects investment in
the energy sector to contract because of low oil prices and
production curtailments in Alberta.
    Bank of Canada Governor Stephen Poloz is due to speak on
monetary policy on Thursday, while Canadian retail sales data
for December is due on Friday.
    Canadian government bond prices were mixed across a steeper
yield curve. The two-year            was flat to yield 1.774
percent and the 10-year             declined 4 Canadian cents to
yield 1.895 percent.

 (Reporting by Fergal Smith; Editing by David Gregorio and James
Dalgleish)
  
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