December 17, 2019 / 8:40 PM / 7 months ago

CANADA FX DEBT-Loonie edges lower on surprise drop in factory sales

 (Adds investor quotes and details throughout; updates prices)
    * Canadian dollar dips 0.1% against the greenback
    * Canadian factory sales decline 0.7% in October
    * Price of U.S. oil rises 1.2%
    * Canadian bond prices fall across the yield curve

    By Fergal Smith
    TORONTO, Dec 17 (Reuters) - The Canadian dollar weakened
slightly against the greenback on Tuesday, retreating from a
near seven-week high the day before, as worries about Brexit
resurfaced and domestic data showed a surprise decline in
manufacturing shipments.    
    Canadian factory sales decreased by 0.7% in October from
September as the United Auto Workers' strike in the United
States weighed on transportation equipment sales, Statistics
Canada said. Analysts had forecast no change.             
    "We had some weak manufacturing numbers," said Hosen
Marjaee, senior portfolio manager at Manulife Asset Management.
"That took a little bit of wind out of our (the loonie's)
sails."
    The Bank of Canada has said that it will take into account
the impact on the economy of trade conflicts when making its
interest rate decisions.
    Clues for the rate outlook could come from Canada's
inflation report for November, which is due for release on
Wednesday.
    The U.S. dollar        rose against a basket of major
currencies amid concerns about Britain's setting a hard deadline
to reach a new trade deal with the European Union.             
    At 2:56 p.m. (1956 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3164 to the greenback, or 75.96 U.S.
cents. The currency traded in a range of 1.3147 to 1.3185.
    On Monday, the loonie notched its strongest intraday level
since Oct. 30 at 1.3115 after a trade deal between the United
States and China.           
    Hopes that the U.S.-China trade deal will bolster oil demand
in 2020 and the prospect of lower U.S. crude supplies supported
the price of oil, one of Canada's major exports. U.S. crude oil
futures        were up 1.20% at $60.93 a barrel.             
    Canadian government bond prices were lower across the yield
curve, with the two-year            down 2.5 Canadian cents to
yield 1.708% and the 10-year             falling 9 Canadian
cents to yield 1.643%.
    On Friday, the 10-year yield touched its highest intraday
level in nearly seven months at 1.695%.

 (Reporting by Fergal Smith; Editing by Nick Zieminski and Peter
Cooney)
  
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