May 23, 2019 / 8:03 PM / 4 months ago

CANADA FX DEBT-C$ hits 6-day low as oil falls by the most in five months

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar declines 0.3% against the greenback
    * Price of U.S. oil slumps 5.7%
    * Canadian wholesale trade rises 1.4% in March
    * Bond prices rally across the yield curve

    By Fergal Smith
    TORONTO, May 23 (Reuters) - The Canadian dollar weakened to
a six-day low against the greenback and lost ground against
other G10 currencies on Thursday, as plunging oil prices
overshadowed domestic data showing a stronger-than-expected gain
for wholesale trade.
    At 3:27 p.m. (1927 GMT), the Canadian dollar          was
trading 0.3% lower at 1.3478 to the greenback, or 74.19 U.S.
cents. The currency touched its weakest intraday level since May
17 at 1.3502.
    The price of oil, one of Canada's major exports, slumped to
its lowest since March 13 as global trade tensions dampened the
demand outlook. U.S. crude oil futures        settled 5.7% lower
at $57.91 a barrel, its biggest decline since Dec. 24.
            
    "It is all about oil and the general direction of the U.S.
dollar," said Mark Chandler, head of Canadian fixed income and
currency strategy at RBC Capital Markets.
    The U.S. dollar        touched its highest level in two
years against a basket of currencies, before reversing lower as
investors weighed prospects of the Federal Reserve cutting
interest rates.             
    "If the Fed is going to cut, chances are it is likely to be
in response to equity market weakness," Chandler said.
    Stocks on Wall Street and U.S. Treasury yields tumbled as
investors worried that a spiraling trade war between the United
States and China would shackle global growth.
                        
    Canadian government bond prices rallied across the yield
curve in sympathy with U.S. Treasuries, with the two-year
           price up 16 Canadian cents to yield 1.578% and the
10-year             rising 86 Canadian cents to yield 1.624%.
    Canadian wholesale trade increased by 1.4% in March from
February, Statistics Canada said, beating analysts estimates of
a 0.9% increase.             

 (Reporting by Fergal Smith
Editing by Nick Zieminski and Phil Berlowitz)
  
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