September 25, 2018 / 8:45 PM / 21 days ago

CANADA FX DEBT-C$ steadies ahead of Fed decision as NAFTA news loses clout

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar at 1.2953 to greenback, or 77.20 U.S.
cents
    * Price of U.S. oil rises 0.3 percent
    * Canada's 10-year yield touches 4-month high at 2.472
percent

    By Fergal Smith
    TORONTO, Sept 25 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Tuesday, shrugging off
news on NAFTA trade talks as the performance of the greenback
became the key driver of the currency before an expected
interest rate hike by the U.S. Fed.
    At 4:01 p.m. (2001 GMT), the Canadian dollar          was
trading nearly unchanged at 1.2953 to the greenback, or 77.20
U.S. cents.
    The currency, which last Thursday touched its strongest
level in more than three months at 1.2885, traded in a narrow
range of 1.2936 to 1.2973.    
    "It is not really the marginal NAFTA news flow that is
driving it," said Ranko Berich, head of market analysis at Monex
Canada and Monex Europe. "It is more general trends in G10
currencies and particularly the U.S. dollar and how the G10 is
performing against the U.S. dollar."
    Most other major currencies were also little changed against
the greenback       , ahead of the interest rate decision on
Wednesday by the Federal Reserve.             
    Canada is not making concessions needed to reach a deal with
the United States for a trilateral NAFTA pact and is running out
of time before Washington proceeds with a Mexico-only agreement,
a top U.S. official said.             
    "We are seeing the market impact of those types of
statements begin to decay," Berich said.
    He expects a deal to renew the North American Free Trade
Agreement will be reached over the next six months.
    As the month-end deadline for North American trade talks
nears, Canadian executives who hedge foreign exchange risk have
been changing their strategies so their companies can profit
from any possible swings in the Canadian dollar.               
    The price of oil, one of Canada's major exports, was boosted
by global supply concerns following U.S. sanctions on Iran's oil
exports, but pared its gains after U.S. President Donald Trump
called again on OPEC to boost crude output.             
    U.S. crude oil futures        settled 0.3 percent higher at
$72.28 a barrel.
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries, with the 10-year
            falling 10 Canadian cents to yield 2.462 percent.
    The 10-year yield touched its highest intraday level since
May 22 at 2.472 percent.
    Bank of Canada Governor Stephen Poloz is due to speak on
Thursday, while Canada's gross domestic product data for July is
due on Friday.

 (Reporting by Fergal Smith; Editing by David Gregorio and Peter
Cooney)
  
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