October 17, 2018 / 1:35 PM / 2 months ago

CANADA FX DEBT-C$ retreats as greenback climbs ahead of Fed minutes

    * Canadian dollar weakens 0.4 percent against the greenback
    * Canadian manufacturing sales fall 0.4 percent
    * Price of U.S. oil declines 1.1 percent
    * Canadian bond prices rise across a flatter yield curve

    TORONTO, Oct 17 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Wednesday, pulling back from an
11-day high the day before as domestic data showed lower factory
shipments and the greenback broadly rose ahead of the release of
Federal Reserve minutes.
    Canadian factory sales fell by 0.4 percent in August from
July on lower motor vehicle sales as a result of atypical
assembly plant shutdowns, Statistics Canada said. Analysts had
forecast a decrease of 0.6 percent.             
    The U.S. dollar        rose to a one-week high against a
basket of major currencies. Minutes of the Fed's September
meeting, due for release later on Wednesday, could help guide
expectations for the number of additional interest rate hikes to
expect from the central bank over the coming months.
            
    The Bank of Canada has also been hiking interest rates.
Economists expect the central bank to hike next week for the
fifth time since July 2017, a Reuters poll showed.             
    They say that the country's economy will continue to grow
faster than its potential over the coming quarters as U.S.
fiscal stimulus boosts demand for its exports.
    At 9:22 a.m. (1322 GMT), the Canadian dollar          was
trading 0.4 percent lower at 1.2986 to the greenback, or 77.01
U.S. cents.
    The currency, which touched on Tuesday its strongest level
since Oct. 5 at 1.2915, traded in a range of 1.2933 to 1.2989.  
  
    The decline for the loonie came as the price of oil, one of
Canada's major exports, slipped after three days of gains.
            
    Markets awaited key U.S. inventory data expected to show a
build in U.S. crude stockpiles. U.S. crude        prices were
down 1.1 percent at $71.15 a barrel.
    Canadian government bond prices were higher across a flatter
yield curve, with the 10-year             rising 16 Canadian
cents to yield 2.483 percent.
    Canadian inflation data for September and the August retail
sales report are due on Friday.

 (Reporting by Fergal Smith; editing by Jonathan Oatis)
  
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