March 20, 2017 / 1:44 PM / 3 years ago

CANADA FX DEBT-C$ dips as lower oil prices offset domestic data strength

    * Canadian dollar at C$1.3349, or 74.91 U.S. cents
    * Bond prices mixed across the yield curve
    * 10-year yield touches its lowest intraday since March 8

    TORONTO, March 20 (Reuters) - The Canadian dollar weakened
on Monday against its U.S. counterpart as lower oil prices
offset strong domestic wholesale trade data, while investors
weighed the G20's decision to drop a pledge to resist trade
    Financial leaders of the world's biggest economies dropped a
pledge to keep global trade free and open, acquiescing to an
increasingly protectionist United States.             
    About 75 percent of Canadian exports go to the United
States. Its economy could be hurt by renegotiation of the North
American Free Trade Agreement (NAFTA) or the implementation of a
proposed U.S. border adjustment tax.             
    Prices of oil, one of Canada's major exports, fell on
concerns that growing U.S. crude output could hamper an
Organization of the Petroleum Exporting Countries-led production
cut deal.             
    U.S. crude        prices were down 1.44 percent at $48.08 a
    Canadian wholesale trade unexpectedly soared by 3.3 percent
in January on stronger sales of motor vehicles and parts,
Statistics Canada data showed. In volume terms, wholesale trade
grew by 3.4 percent, which is likely to bolster overall economic
growth for the month.             
    At 9:21 a.m. ET (1321 GMT), the Canadian dollar          was
trading at C$1.3349 to the greenback, or 74.91 U.S. cents,
slightly weaker than Friday's close of C$1.3337, or 74.98 U.S.
    The currency traded in a range of C$1.3304 to C$1.3371.
    The loonie rose 0.9 percent last week, helped by
stronger-than-expected domestic manufacturing data and the
prospect of Federal Reserve interest rate hikes proceeding at
only a gradual pace.    
    Speculators cut bullish bets on the Canadian dollar for the
second straight week, data from the Commodity Futures Trading
Commission and Reuters calculations showed on Friday. Canadian
dollar net long positions fell to 21,458 contracts as of March
14 from 29,220 a week earlier.             
    Canadian government bond prices were mixed across the yield 
curve, with the two-year            up 0.5 Canadian cent to
yield 0.803 percent and the 10-year             falling 4
Canadian cents to yield 1.765 percent.
    The 10-year yield touched its lowest intraday since March 8
at 1.751 percent.
    Domestic retail sales data for January is due on Tuesday and
the Canadian government will release its federal budget on
    Canada's finance minister will give an update on the deficit
when he presents the federal budget, hoping to flesh out plans
to spend the way to growth without drawing the wrath of debt
rating agencies and businesses struggling to compete.

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli)
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