May 14, 2018 / 8:37 PM / 2 years ago

CANADA FX DEBT-C$ dips as greenback turns broadly higher

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    * Canadian dollar at C$1.2805, or 78.09 U.S. cents
    * Bond prices lower across steeper yield curve
    * 10-year yield touches 4-year high at 2.426 percent

    By Fergal Smith
    TORONTO, May 14 (Reuters) - The Canadian dollar turned lower
against its U.S. counterpart on Monday as the greenback broadly
rose and U.S. stocks pared their earlier gains.
    At 4 p.m. EDT (2000 GMT), the Canadian dollar          was
trading 0.1 percent lower at C$1.2805 to the greenback, or 78.09
U.S. cents. The currency traded in a range of C$1.2750 to
    "It's just a (U.S.) dollar positive end to the day," said
David Bradley, director of foreign exchange trading at
Scotiabank. "Everything just turned mid-morning."
    The U.S. dollar        was boosted by higher U.S. Treasury
yields. It erased earlier losses to rise against a basket of
major currencies.             
    Wall Street ended a choppy session slightly higher after
U.S. President Donald Trump's conciliatory remarks toward
China's ZTE Corp helped calm U.S.-China trade tensions.
    Canada's commodity-linked currency tends to be sensitive to
movement in stocks due to the signal that stocks send about
prospects for global growth.
    The price of oil, one of Canada's major exports, rose as
OPEC reported that the global oil glut has been virtually
eliminated. U.S. crude oil futures        settled 0.4 percent
higher at $70.96 a barrel.             
    On Friday, the loonie reached a three-week high at C$1.2730
but was then pressured by domestic data showing a surprise April
jobs decline.                         
    Canadian home prices rose slightly in April but the rate of
appreciation continued to decelerate amid softening sales and
higher interest rates. The Teranet-National Bank Composite House
Price Index, which measures changes for repeat sales of
single-family homes, showed prices increased 0.2 percent on a
monthly basis after a flat month in March.             
    Trump administration demands in North American Free Trade
Agreement negotiations meant to push auto jobs back to the
United States may not be enough to spark a shift in where
automakers build cars and trucks.             
    Canada sends about 75 percent of its exports to the United
States so its economy could benefit if a NAFTA deal is reached.
    Canadian government bond prices were lower across a steeper
yield curve, with the two-year            price down 4.5
Canadian cents to yield 1.99 percent and the benchmark 10-year
            falling 37 Canadian cents to yield 2.421 percent.
    The 10-year yield touched its highest intraday since May
2014 at 2.426 percent.

 (Reporting by Fergal Smith
Editing by Nick Zieminski and Tom Brown)
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