April 2, 2018 / 8:39 PM / 7 months ago

CANADA FX DEBT-C$ dips as stocks and oil tumble on rising trade tensions

 (Adds strategist quote and details on market activity
throughout; updates prices)
    * Canadian dollar at C$1.2916, or 77.42 U.S. cents
    * Loonie touches its weakest since March 22
    * Oil prices fall nearly 3 percent
    * Bond prices lower across the yield curve

    By Fergal Smith
    TORONTO, April 2 (Reuters) - The Canadian dollar slipped to
an 11-day low against its U.S. counterpart on Monday as
escalation of a trade dispute between the world's biggest
economies weighed on global stock markets and oil prices.
    At 4 p.m. EDT (2000 GMT), the Canadian dollar          was
trading 0.1 percent lower at C$1.2916 to the greenback, or 77.42
U.S. cents. 
    The currency's strongest level of the session was C$1.2864,
while it touched its weakest since March 22 at C$1.2944.
    "It has been a broad based risk aversion move rather than
anything CAD specific," said Eric Theoret, a currency strategist
at Scotiabank.
    U.S. stocks plunged as investors fled technology shares amid
resurging trade worries, sending the S&P 500 and the Dow Jones
Industrial Average below their 200-day moving averages for the
first time since the Brexit vote in June 2016.             
    China has increased tariffs by up to 25 percent on 128 U.S.
products in response to U.S. duties on imports of aluminum and
steel. A global trade war could hurt Canada's commodity-linked
economy.                  
    The price of oil, one of Canada's major exports, was
pressured by a rise in Russian production, expectations that
Saudi Arabia will cut prices of the crude it sends to Asia and
the deepening U.S.-China trade spat.             
    U.S. crude oil futures        settled nearly 3 percent lower
at $63.01 a barrel.
    The pace of growth in the Canadian manufacturing sector
firmed in March, data showed. The Markit Canada Manufacturing
Purchasing Managers' index, a measure of manufacturing business
conditions, increased to a seasonally adjusted 55.7 last month
from 55.6 in February.                 
    Canadian government bond prices were lower across the yield
curve, with the two-year            down 1.2 Canadian cents to
yield 1.784 percent and the 10-year             falling 19
Canadian cents to yield 2.116 percent.
    On Thursday, the 10-year yield touched its lowest intraday
since Jan. 4 at 2.073 percent.
    Canadian trade data for February is due on Thursday and the
March employment report is due on Friday.

 (Reporting by Fergal Smith
Editing by Tom Brown)
  
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