November 25, 2019 / 8:55 PM / 8 months ago

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

 (Adds details on activity; updates prices)
    * Wholesale trade rises by 1% in September
    * Price of U.S. oil rises 0.5%
    * Canadian bond prices little changed across the yield curve

    By Fergal Smith
    TORONTO, Nov 25 (Reuters) - The Canadian dollar was
unchanged against its U.S. counterpart on Monday, steadying
after it declined last week, as strong domestic data offset
evidence that a strike at Canada's biggest railroad was taking a
toll on the country's economy
    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.
    The strike at Canadian National Railway Co          became a
bigger threat to economic growth in the fourth quarter.
Fertilizer company Nutrien Ltd          said it was planning
production cutbacks, while grain exporters warned buyers they
could not fulfill sales terms.             
    Economists have estimated a prolonged strike could cost the
Canadian economy billions of dollars.
    At 3:26 p.m. (2026 GMT), the Canadian dollar          was
trading unchanged at 1.3304 to the greenback, or 75.17 U.S.
cents. The currency, which declined 0.6% last week, traded in a
range of 1.3286 to 1.3319.
    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
    World shares          rallied 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        rose 0.5% to $58.04 a barrel,
approaching last Friday's near two-month high.             
    Canadian government bond prices were little changed across
the yield curve, with the two-year            down 1 Canadian
cent to yield 1.585% and the 10-year             flat to yield

 (Reporting by Fergal Smith; Editing by Grant McCool and Peter
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