December 19, 2019 / 8:03 PM / 4 months ago

CANADA FX DEBT-Loonie holds near 7-week high, underpinned by better global outlook

 (Adds strategist quotes and details throughout; updates prices)
    * Loonie dips 0.1% against the greenback
    * Canadian wholesale trade falls 1.1% in October
    * Canadian payroll employment rises by 30,900 in November
    * Canadian bond prices rise across the yield curve

    By Fergal Smith
    TORONTO, Dec 19 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Thursday, but held near a
seven-week high as investors valued its potential to benefit
from an improved outlook for the global economy.
    Wall Street hit all-time highs again as U.S. Treasury
Secretary Steven Mnuchin said an initial trade deal between the
United States and China would be signed in early January, adding
to optimism that was fueled by a breakthrough in trade talks
last week.             
    Canada is a major exporter of commodities, including oil, so
its economy could benefit from an improved outlook for global
growth.    
    "In a world where global growth is improving Canada looks
awfully attractive," said Adam Button, chief currency analyst at
ForexLive.    
    Stable government and relatively high interest rates add to
the attractiveness of the Canadian dollar, Button said.
    The Bank of Canada has left its benchmark interest rate on
hold this year at 1.75% despite easing by some global peers,
such as the Federal Reserve and the European Central Bank.
    At 2:29 p.m. EST (1929 GMT), the Canadian dollar         
was trading 0.1% lower at 1.3124 to the greenback, or 76.20 U.S.
cents. The currency, which notched on Wednesday a seven-week
high at 1.3103, traded in a range of 1.3108 to 1.3138.    
    U.S. crude oil futures        settled 0.5% higher at $61.22
a barrel, buoyed by falling U.S. crude inventories and thawing
U.S.-China trade relations.                     
    Canadian wholesale trade declined by 1.1% in October from
September on weaker sales in the machinery, equipment and
supplies subsector, as well as agricultural supplies, Statistics
Canada said. Analysts had forecast a 0.1% decrease.             
    Separate data from payroll services provider ADP showed that
Canada added 30,900 jobs in November, the fifth straight month
of gains.                 
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 5 Canadian cents to yield 1.700% and the 10-year
            was up 31 Canadian cents to yield 1.657%.
    Earlier in the session, the 10-year yield touched its
highest level since May 22 at 1.736%.
    Canada's retail sales report for October is due on Friday.

 (Reporting by Fergal Smith; editing by Diane Craft
Editing by Mark Heinrich and Diane Craft)
  
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