May 23, 2018 / 1:46 PM / a month ago

CANADA FX DEBT-C$ hits one-week low as stocks, oil prices fall

    * Canadian dollar at C$1.2873, or 77.68 U.S. cents
    * Loonie touches its weakest since May 15 at C$1.2916
    * Bond prices higher across a flatter yield curve

    By Fergal Smith
    TORONTO, May 23 (Reuters) - The Canadian dollar weakened to
a more than one-week low against its U.S. counterpart on
Wednesday as the greenback broadly climbed, while stocks and oil
prices fell.
    At 9:27 a.m. EDT (1327 GMT), the Canadian dollar         
was trading 0.4 percent lower at C$1.2873 to the greenback, or
77.68 U.S. cents. The currency touched its weakest level since
May 15 at C$1.2916.
    Losses for the loonie came as fresh uncertainty over
U.S.-China trade talks weighed on global stocks.             
    Canada's commodity-linked currency tends to track movement
in equities due to the signal that stock markets send about
prospects for growth.
    The price of oil, one of Canada's major exports, was
pressured by a potential increase in OPEC crude output to cool
the market's recent rally and cover any shortfalls in supply
from Iran and Venezuela.             
    U.S. crude        prices were down 0.5 percent at $71.86 a
barrel.
    The U.S. dollar        rose against a basket of major
currencies as fresh data indicating a slowdown in European
business activity and concerns over Italian politics weighed on
the euro.                          
    Top U.S., Canadian and Mexican officials are in constant
contact about slow-moving talks to revitalize the North American
Free Trade Agreement (NAFTA) and are ready to meet at any time
to push the process forwards, Canada's foreign minister,
Chrystia Freeland, said on Tuesday.             
    Canada sends 75 percent of its exports to the United States
so its economy could be hurt if a NAFTA deal is not reached.
    Still, lending to small Canadian businesses picked up in
March as gains were seen in the manufacturing and construction
industries, boding well for stronger economic growth in the
coming months, data on Wednesday showed.               
    Canadian government bond prices were higher across a flatter
yield curve as waning risk appetite boosted U.S. Treasuries
ahead of a Federal Reserve report that would be watched for
clues on the pace of future interest rate hikes.
    Canada's two-year            rose 6.5 Canadian cents to
yield 2.023 percent and the 10-year             climbed 57
Canadian cents to yield 2.45 percent.

 (Reporting by Fergal Smith; editing by Jonathan Oatis)
  
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