October 2, 2017 / 2:11 PM / 2 months ago

CANADA FX DEBT-C$ retreats against firmer greenback as oil prices slide

    * Canadian dollar at C$1.2505, or 79.97 U.S. cents
    * Bond prices mixed across the yield curve

    TORONTO, Oct 2 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Monday after a drop in the price
of oil, one of Canada's major exports, and a broad rise for the
greenback.
    Renewed prospects of U.S. tax cuts that could boost the
economy have helped lift the U.S. dollar        against a basket
of major currencies, while a violence-marred independence vote
in Spain's Catalonia region weighed on the euro.             
    U.S. crude oil        was down 2.63 percent at $50.31 a
barrel as a rise in U.S. drilling and higher output from the
Organization of the Petroleum Exporting Countries put the brakes
on a rally that brought the biggest third-quarter price gain in
13 years.             
    At 9:28 a.m. ET (1328 GMT), the Canadian dollar          was
trading at C$1.2505 to the greenback, or 79.97 U.S. cents, down
0.3 percent.
    The currency traded in a range of C$1.2466 to C$1.2524. It
touched a four-week high at C$1.2531 on Friday, when data
showing that Canada's economy stalled in July further dampened
prospects of another interest rate hike by the central bank this
month.
    The Bank of Canada raised rates in July and September after
the country's growth accelerated in the first half of the year,
but speeches by the bank's policymakers have helped talk down
the Canadian dollar in recent weeks after the currency's
strength put growth at risk.
    Still, speculators have raised bullish bets on the loonie to
their highest since November 2012, data from the U.S. Commodity
Futures Trading Commission and Reuters calculations showed on
Friday.             
    As of Sept. 26, Canadian dollar net long positions had
climbed to 74,605 contracts from 58,846 a week earlier.
    Canadian government bond prices were mixed across the yield
curve, with the two-year            down 1.5 Canadian cents to
yield 1.527 percent and the 10-year             rising 1
Canadian cent to yield 2.097 percent.
    Last week, the 10-year yield touched a three-year high at
2.202 percent.
    Central bank Deputy Governor Sylvain Leduc will speak on
Tuesday on productivity in the Canadian economy.
    Canada's trade data for August is due on Thursday, and the
September employment report is set for release on Friday.

 (Reporting by Fergal Smith; Editing by Lisa Von Ahn)
  
 

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