February 14, 2020 / 8:31 PM / 5 months ago

CANADA FX DEBT-Loonie rises to 11-day high on hopes virus impact will fade

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar rises 0.1% against the greenback
    * Loonie touches its strongest level since Feb. 3 at 1.3236
    * Price of U.S. oil increases 1.2%
    * Canadian bond yields fall across a flatter yield curve

    By Fergal Smith
    TORONTO, Feb 14 (Reuters) - The Canadian dollar strengthened
on Friday against its U.S. counterpart, adding to this week's
gains as investors speculated that the coronavirus outbreak
would not cause long-lasting damage to the global economy.
    At 3:10 p.m. (2010 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3249 to the greenback, or 75.48 U.S.
cents. The currency touched its strongest intraday level since
Feb. 3 at 1.3236.
    For the week, the loonie was up 0.4%.    
    "The broader markets are still believing that China has got
this (the spread of the coronavirus) under control," said Erik
Bregar, head of FX strategy at the Exchange Bank of Canada. "It
has created a mild risk-on environment and that benefits the
Canadian dollar."
   Canada is a major exporter of commodities, including oil, so
the loonie tends to be sensitive to prospects for global
economic growth.
    U.S. crude oil futures        settled 1.2% higher at $52.05
a barrel as investors bet the economic impact of the virus would
be short-lived and hoped for further Chinese central bank
stimulus to tackle any slowdown.                 
    Canadian home sales fell 2.9% in January from the previous
month but were up 11.5%, not seasonally adjusted, compared to
January 2019, the Canadian Real Estate Association said.
    Canada's Liberal government said it was deeply concerned
about protests by aboriginal activists that are blocking some
key railway lines but rejected a call to send in the police.
    Canadian government bond yields were lower across a flatter
yield curve in sympathy with U.S. Treasuries after a mixed U.S.
retail sales report for January. The 10-year yield fell 3.1
basis points to 1.363%.
    Canadian markets will be closed on Monday for the Family Day

 (Reporting by Fergal Smith; Editing by David Gregorio
Editing by Marguerita Choy)
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