July 8, 2019 / 1:30 PM / 4 months ago

CANADA FX DEBT-C$ nears 8-month high ahead of Bank of Canada rate decision

    * Canadian dollar rises 0.2% against the greenback
    * Price of U.S. oil increases 0.4%
    * Canadian bond prices fall across the yield curve
    * Canada-U.S. 2-year spread hit its narrowest since January
2018  

    TORONTO, July 8 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Monday, with the currency moving
closer to last week's eight-month high ahead of an interest rate
decision on Wednesday from the Bank of Canada.
    At 9:05 a.m. (1305 GMT), the Canadian dollar          was
trading 0.2% higher at 1.3054 to the greenback, or 76.60 U.S.
cents. The currency, which on Thursday touched its strongest
since Oct. 25, last year at 1.3038, traded in a range of 1.3050
to 1.3083.
    The gain for the loonie came after Canada's employment
report on Friday showed that wages jumped in June by the most in
more than a year - a sign of strength analysts said ruled out
the chances of the Bank of Canada cutting interest rates this
week.             
    The central bank will keep its key interest rate on hold at
1.75% through to the end of next year at least, according to a
Reuters poll, diverging from expected easing from the U.S.
Federal Reserve.             
    Canadian government bond prices were lower across a flatter
yield curve on Monday, with the two-year            down 5
Canadian cents to yield 1.651% and the 10-year            
falling 3 Canadian cents to yield 1.574%.
    The gap between Canada's 2-year yield and its U.S.
counterpart narrowed by 4.4 basis points to a spread of 20.7
basis points in favor of the U.S. bond, its smallest gap since
January 2018.   
    The price of oil, one of Canada's major exports, was
supported by tensions over Iran's nuclear program but gains were
tempered by global economic growth concerns. U.S. crude oil
futures        rose 0.4% to $57.71 a barrel.             

 (Reporting by Fergal Smith
Editing by Nick Zieminski)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below