May 22, 2019 / 1:41 PM / 4 months ago

CANADA FX DEBT-C$ climbs to 4-week high, boosted by retail sales gain

    * Loonie gains 0.2% against the greenback
    * Canadian retail sales rise by 1.1% in March
    * Price of U.S. oil falls 1.4%
    * Canadian bond prices rise across the yield curve

    By Fergal Smith
    TORONTO, May 22 (Reuters) - The Canadian dollar strengthened
to a near one-month high against the greenback on Wednesday as
U.S. President Donald Trump told congress to prioritize a trade
deal with Canada and Mexico, and as domestic data showed a jump
in retail sales.
    Canadian retail sales grew by 1.1% in March from February,
due largely to higher sales at gasoline stations, Statistics
Canada said. Sales volumes were more subdued, rising 0.3%.
            
    "The strong headline print coupled with some upward
revisions to the prior month have markets bidding up the loonie
and selling fixed income, though the reading shouldn't change
the outlook very much," Royce Mendes, a senior economist at CIBC
Capital Markets said in a note.  
    Trump told Democratic leaders on Tuesday to pass the United
States-Mexico-Canada trade pact before working on an
infrastructure bill. Last week, his administration announced it
would remove U.S. tariffs on Canadian and Mexican steel and
aluminum, a major hurdle to the passage of the trade agreement,
but a number of Democrats have expressed concerns about other
parts of the deal.             
    At 9:14 a.m. (1314 GMT), the Canadian dollar          was
trading 0.2% higher at 1.3381 to the greenback, or 74.73 U.S.
cents. The currency touched its strongest intraday level since
April 23 at 1.3358.
    Gains for the loonie came despite a drop in the price of
oil, one of Canada's major exports, after industry data showed
an increase in U.S. crude inventories and on demand concerns
linked to a protracted trade war between China and the United
States. U.S. crude oil futures        were down 1.4% at $62.24 a
barrel.              
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 2.5 Canadian cents to yield 1.671% and the 10-year
            climbed 19 Canadian cents to yield 1.741%.
    On Tuesday, the 10-year yield touched its highest intraday
since May 3 at 1.764%.

 (Reporting by Fergal Smith; Editing by David Gregorio)
  
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