September 17, 2018 / 7:58 PM / 2 years ago

CANADA FX DEBT-C$ steadies ahead of trade news as investors bet on volatility

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar at 1.3029 to the greenback, or 76.75 U.S.
    * Price of U.S. oil dips 0.1 percent
    * Bond prices edge higher across the yield curve

    By Fergal Smith
    TORONTO, Sept 17 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Monday as investors sat
tight ahead of potential news on trade after buying option
structures in recent days that could profit from increased
volatility in the currency.
    U.S. President Donald Trump said he would announce his
latest plan on China tariffs after the markets close, with
expectations he would level them on about $200 billion of
Chinese imports.             
    Canada runs a current account deficit, so its economy could
be hurt if the global flow of trade or capital slows.
    The country has its own trade feud with the United States
and is also in talks to revamp the North American Free Trade
    "There are quite a few names that are sitting on long
butterfly positions, so they'll make money if it (the Canadian
dollar) moves up or down," said Simon Côté, managing director,
risk management solutions, National Bank Financial. "We just
need a decent move either way before they take profit or
restructure what they have."
    At 3:27 p.m. (1927 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3029 to the greenback, or 76.75
U.S. cents. The currency, which rose nearly 1 percent last week,
traded in a range of 1.3002 to 1.3048.
    The price of oil, one of Canada's major exports, dipped as
the market weighed deepening trade tension that is expected to
dent global crude demand and potential supply tightening due to
Iran sanctions. U.S. crude oil futures        settled 0.1
percent lower at $69.91 a barrel.              
    The U.S. dollar        retreated as sterling and the euro
were boosted by optimism that Britain would reach a deal with
the European Union on the terms of its departure from the bloc.
    Foreign investors bought a net C$12.65 billion in Canadian
securities following a revised C$10.30 billion total purchase in
June, while Canadian investment in foreign securities also
climbed, data from Statistics Canada showed.             
    In separate data, resales of Canadian homes rose 0.9 percent
in August from July, notching the fourth straight monthly rise
but remaining below the highs seen in recent years, the Canadian
Real Estate Association said.             
    Canadian government bond prices edged higher across the
yield curve, with the 10-year             rising 3 Canadian
cents to yield 2.342 percent. Still, the 10-year yield held near
its highest level in nearly six weeks.
    Canada's inflation report for August and July retail sales
data are due on Friday.

 (Reporting by Fergal Smith
Editing by Paul Simao and Alistair Bell)
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