November 25, 2019 / 3:00 PM / 17 days ago

CANADA FX DEBT-Loonie steadies as wholesale trade lifts Canada's economy

    * Canadian dollar trades near flat against the greenback
    * Wholesale trade rises by 1% in September
    * Bond prices dip across a flatter yield curve

    By Fergal Smith
    TORONTO, Nov 25 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Monday as domestic data
showing increased wholesale trade offset signs that a strike at
Canada's biggest railroad was set to continue.
    Canadian wholesale trade rose by 1.0% in September from
August, much stronger than the 0.4% gain that was expected.
Sales grew by 0.9% in volume terms.             
    "Wholesale trade provided a nice lift to September economic
activity in Canada that otherwise had looked fairly tepid,"
Avery Shenfeld, chief economist at CIBC Capital Markets, said in
a note.
    "Markets don't typically react to this series, but might
take note of the firmer real GDP print later this week that
incorporates these data," Shenfeld said.
    Canada's gross domestic product data for the third quarter
is due on Friday, which could help guide expectations for next
week's Bank of Canada interest rate decision.
    Labor union Teamsters Canada said it has made no progress in
reaching an agreement with Canadian National Railway Co
        . Economists have estimated a prolonged strike could
cost the Canadian economy billions of dollars.             
    At 9:49 a.m. (1449 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3298 to the greenback, or 75.20
U.S. cents. The currency, which declined 0.6% last week, traded
in a range of 1.3286 to 1.3316.
    The loonie has been pressured since October by a more dovish
stance from the Bank of Canada. Last Wednesday, it hit a near
six-week low at 1.3328.    
    Investors have cut bullish bets on the Canadian dollar, data
from the U.S. Commodity Futures Trading Commission and Reuters
calculations showed. As of Nov. 19, net long positions in the
currency had fallen to 28,865 contracts from 42,373 in the prior
week.             
    World shares staged a cautious rally on Monday as hopes rose
for a trade deal between the United States and China.
             China said on Sunday it would seek to improve
protections for intellectual property rights.            
    Canada is a major exporter of commodities, including oil, so
its economy could benefit from a reduction in trade uncertainty.
    U.S. crude oil futures        were down 0.1% to $57.73 a
barrel, steadying after they notched on Friday a near two-month
high intraday at $58.74.                       
    Canadian government bond prices were lower across a flatter
yield curve, with the two-year            down 3 Canadian cents
to yield 1.596% and the 10-year             falling 2 Canadian
cents to yield 1.475%.

 (Reporting by Fergal Smith; editing by Grant McCool)
  
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