February 25, 2019 / 2:44 PM / 25 days ago

CANADA FX DEBT-C$ reverses from near 3-week high as oil prices drop

    * Canadian dollar dips against greenback after earlier rise
    * Loonie touches its strongest intraday since Feb. 5 at
1.3113
    * Price of U.S. oil falls nearly 2 percent
    * Bond prices fall across the yield curve

    TORONTO, Feb 25 (Reuters) - The Canadian dollar edged lower
against the greenback on Monday, pulling back from its highest
in nearly three weeks earlier in the session as lower oil prices
offset news that U.S. President Donald Trump would delay a hike
in tariffs on Chinese imports.
    Trump on Sunday said he would delay an increase in U.S.
tariffs on Chinese goods thanks to "productive" trade talks and
that he and Chinese President Xi Jinping would meet to seal a
deal if progress continued.             
    Canada exports many commodities, including oil, so its
economy could benefit from an improved outlook for global trade.
    The price of oil reversed earlier gains after Trump told
OPEC producers to "relax" as prices were too high. U.S. crude
oil futures        were down nearly 2 percent at $56.12 a
barrel.             
    At 9:23 a.m. (1423 GMT), the Canadian dollar          was
trading 0.1 percent lower at 1.3145 to the greenback, or 76.07
U.S. cents. The currency's weakest level of the session was
1.3157, while it touched its strongest since Feb. 5 at 1.3113.
    The modest decline for the loonie came as Canada's Barrick
Gold Corp          offered to buy U.S. rival Newmont Mining Corp
        for nearly $18 billion in stock, in a deal that would
combine the world's two largest gold producers.             
    Data on 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 Feb. 5, net
short positions had fallen to 42,037 contracts from 56,390 in
the prior week.             
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year           
fell 2.5 Canadian cents to yield 1.791 percent and the 10-year
            declined 17 Canadian cents to yield 1.911 percent.
    Canada's inflation report for January is due on Wednesday
and fourth-quarter domestic product data is due on Friday, which
could help guide expectations for further interest rate hikes
from the Bank of Canada.          

 (Reporting by Fergal Smith; Editing by Andrea Ricci)
  
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