August 15, 2017 / 10:25 PM / 3 years ago

CANADA FX DEBT-C$ hits 1-month low as firm U.S. data boosts greenback

 (Adds analyst quotes and details throughout; updates prices)
    * Canadian dollar at C$1.2757, or 78.39 U.S. cents
    * Loonie touches its weakest since July 12 at C$1.2778
    * Bond prices lower across a steeper yield curve

    By Fergal Smith
    TORONTO, Aug 15 (Reuters) - The Canadian dollar hit a
one-month low against its U.S. counterpart on Tuesday, pressured
by broader gains for the greenback, as North Korea tensions
eased and data showed a jump in U.S. retail sales.
    The U.S. dollar        climbed against a basket of major
currencies after North Korea's leader delayed a decision on
firing missiles toward Guam. Also aiding the greenback, U.S.
retail sales recorded their biggest increase in seven months in
    Worries that weaker growth in China will weigh on commodity
prices added to pressure on Canada's commodity-linked currency,
said Amo Sahota, director at Klarity FX in San Francisco.       
    U.S. crude oil prices        hit a three-week low before
paring some losses, while copper         prices also lost
    At 5 p.m. EDT (2100 GMT), the Canadian dollar          was
trading at C$1.2757 to the greenback, or 78.39 U.S. cents, down
0.3 percent.
    The currency's strongest level of the session was C$1.2720,
while it touched its weakest since July 12 at C$1.2778.
    Resales of Canadian homes fell 2.1 percent in July from
June, the fourth straight monthly decline, as the cooling down
of the Toronto housing market continued, the Canadian Real
Estate Association said.                 
    Separate data showed that lending to Canadian small
businesses rose for a fifth straight month in June on stronger
activity in construction and other major industries, suggesting
companies are adding to solid growth in the domestic economy.
    Canadian government bond prices were lower across a steeper
yield curve in sympathy with U.S. Treasuries. The two-year
           fell 3.5 Canadian cents to yield 1.243 percent and
the 10-year             declined 25.5 Canadian cents to yield
1.907 percent.
    Investors are awaiting negotiations for modernizing the
North American Free Trade Agreement, which start on Wednesday,
and Canada's inflation data for July, due on Friday.         
    There may be some position squaring by investors who had got
long the Canadian dollar ahead of the inflation report, Sahota
    Soft inflation data could reduce the chances of additional
interest rate hikes, he added. The central bank hiked rates last
month for the first time in nearly seven years.

 (Reporting by Fergal Smith; Editing by James Dalgleish)
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