November 28, 2019 / 9:04 PM / 17 days ago

CANADA FX DEBT-C$ keeps to narrow range as investors brace for key GDP data

 (Adds dealer quotes and details throughout; updates prices)
    * Canadian dollar trades near flat against the greenback
    * Price of U.S. oil increases by 0.2%
    * Canada's current account deficit widens to C$9.86 billion
    * Canadian bond prices rise across the yield curve

    By Fergal Smith
    TORONTO, Nov 28 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Thursday, sticking to a
narrow range as U.S.-China tensions rose and domestic GDP data
loomed that could guide Bank of Canada interest rate
expectations.
    Canada's gross domestic product data is due on Friday, which
is expected to show that the economy slowed in the third
quarter.
    "If the number were to come in lower than expectations, then
I think what you would find is Canadian dollar bears will
instantly expect more dovish comments from the Bank of Canada
next week," said Brad Schruder, director of corporate sales and
structuring at BMO Capital Markets.
    The Bank of Canada will make an interest rate decision on
Dec. 4. Last month, the central bank cut its economic growth
forecasts and expressed concern about global trade uncertainty.
    Still, a slim majority of economists in a Reuters poll
expect the bank to leave rates on hold through to the end of
next year.                       
    A four-day rally that had lifted world stocks to near-record
highs stalled after China said it would retaliate for U.S.
legislation backing Hong Kong's protesters, leaving investors
concerned as to the extent of the Chinese response.             
    "We all are waiting to see what is going to happen (to the
markets) when everyone returns to work," Schruder said.
    U.S. stock and bond markets were closed for Thanksgiving.
    At 3:29 p.m. (2029 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3280 to the greenback, or 75.30
U.S. cents. The currency traded in a range between 1.3278 to
1.3299.
    U.S. crude oil futures        clawed back earlier losses,
rising 0.2% to $58.24 a barrel. Oil is one of Canada's major
exports.
    Canada's current account deficit widened to C$9.86 billion
in the third quarter from a revised C$6.74 billion deficit in
the second quarter, on a higher deficit on goods, Statistics
Canada said. Analysts had forecast a deficit of C$9 billion.
            
    Separate data from Statistics Canada showed that average
weekly earnings of non-farm payroll employees rose at an annual
rate of 4% in September, while the number of payroll employees
declined by 28,000 for the month.
    Canadian government bond prices were higher across the yield
curve, with the two-year            up 2.5 Canadian cents to
yield 1.588% and the 10-year             rising 13 Canadian
cents to yield 1.460%.    

 (Reporting by Fergal Smith
Editing by Alistair Bell and Nick Zieminski)
  
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