March 15, 2019 / 8:55 PM / 6 days ago

CANADA FX DEBT-C$ pares weekly gain as oil falls, home sales tumble

 (Adds dealer quotes and details throughout; updates prices)
    * Canadian dollar dips 0.1 percent against the greenback
    * Canadian homes sales slump 9.1 percent in February 
    * Price of U.S. oil declines 0.2 percent
    * Canada's 10-year yield touches its lowest since June 2017

    By Fergal Smith
    TORONTO, March 15 (Reuters) - The Canadian dollar edged
lower against its U.S. counterpart on Friday, reducing its gains
for the week as oil prices fell and domestic data showed a steep
drop in home sales that offset evidence of
stronger-than-expected manufacturing activity.
    At 4:05 p.m. (2005 GMT), the Canadian dollar          was
trading 0.1 percent lower at 1.3348 to the greenback, or 74.92
U.S. cents. The currency traded in a range of 1.3290 to 1.3372.
    For the week, the loonie was up 0.6 percent.
    "A lot of noise in the market but not a lot movement today,"
said Rahim Madhavji, president at Knightsbridge Foreign
Exchange. "It still comes down to interest rates and jobs for
the longer term."
    Data last Friday showed a second consecutive month of bumper
job gains that quelled concerns that Canada's economy could be
headed for a recession.             
    The Bank of Canada is unlikely to cut interest rates to
support a flagging economy as long as job growth continues at a
robust pace, an analysis of the central bank's response to past
divergences in economic data suggests.              
    On Friday, domestic data was mixed.
    Canadian home sales tumbled 9.1 percent in February from the
previous month to hit their lowest level since November 2012,
the Canadian Real Estate Association said.             
    But separate data, from Statistics Canada, showed that
factory sales were up by 1.0 percent in January from December.
Analysts surveyed by Reuters had forecast on average an increase
of 0.4 percent.                 
    The price of oil, one of Canada's major exports, retreated
as worries about the global economy and robust U.S. production
put a brake on prices. U.S. crude oil futures        settled 0.2
percent lower at $58.52 a barrel.      
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries after data showing U.S.
manufacturing output fell for a second straight month in
February.             
    The two-year            rose 6 Canadian cents to yield 1.624
percent and the 10-year             climbed 35 Canadian cents to
yield 1.716 percent. The 10-year yield touched its lowest
intraday since June 2017 at 1.704 percent.

 (Reporting by Fergal Smith; editing by Diane Craft)
  
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