November 27, 2019 / 9:57 PM / 18 days ago

CANADA FX DEBT-Canadian dollar edges lower as attention shifts to GDP data

 (Recasts with strategist quotes, details; updates prices)
    * Canadian dollar falls 0.1% against the greenback
    * Loonie touches its strongest intraday since Nov. 22 at
1.3261
    * Price of U.S. oil decreases by 0.5%
    * Canadian bond prices fall across the yield curve

    By Fergal Smith
    TORONTO, Nov 27 (Reuters) - The Canadian dollar weakened
slightly against the greenback on Wednesday, pulling back from
an earlier five-day high as investors awaited GDP data that
could guide expectations for the Bank of Canada's interest rate
outlook.
    Canada's third quarter gross domestic product data is due on
Friday. Economists expect the economy has slowed after expanding
by 3.7% annualized in the second quarter.
    "I think we are in a hiatus move (for the loonie) until we
get the GDP data," said Amo Sahota, director at Klarity FX in
San Francisco. "That is going to be the key driver, otherwise I
think it is still trading risk-on, risk-off with the U.S.-China
trade agreement focus."
    Wall Street's main indexes closed at record levels for a
third straight day in a muted volume session ahead of the
Thanksgiving holiday, as fresh data pointed to an economy on
solid footing. Investors remained cautiously optimistic about a
resolution to trade tensions between the United States and
China.             
    The Bank of Canada, which will make a policy decision next
week, has expressed concern about the impact of trade conflicts
on Canada's commodity-linked economy.
    The central bank is now expected to leave rates on hold
through to the end of next year, according to a slim majority of
economists in a Reuters poll.             
    At 4:27 p.m. (2127 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3280 to the greenback, or 75.30 U.S.
cents. Earlier in the session, the currency touched its
strongest level since Nov. 22 at 1.3261.
    The five-day high for the loonie came as operations resumed
at Canada's largest railway, Canadian National Railway Co
        , a day after the company and union officials reached a
tentative deal to end an eight-day-long strike that triggered a
severe propane shortage and left many Canadian exports stranded.
            
    The price of oil, one of Canada's major exports, fell as an
industry report showed a surprise boost in U.S. crude
inventories. U.S. crude oil futures        were down 0.5% at
$58.11 a barrel.             
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries after data showed that
new orders for key U.S.-made capital goods increased by the most
in nine months in October.             
    The 10-year             fell 30 Canadian cents to yield
1.474%.

 (Reporting by Fergal Smith; editing by Jonathan Oatis and Tom
Brown)
  
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