August 29, 2019 / 2:15 PM / 2 months ago

CANADA FX DEBT-C$ firms as current account deficit hits narrowest in 11 years

    * Canadian dollar rises 0.1% against the greenback
    * Canada's Q2 current account deficit narrows to C$6.38
billion
    * Price of U.S. oil increases nearly 1%
    * Canadian bond prices edge higher across the yield curve

    TORONTO, Aug 29 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Thursday as oil prices rose and
data showed that the country's current account deficit was the
lowest in the second quarter since 2008.
    Canada's current account deficit narrowed to C$6.38 billion
in the second quarter from a revised C$16.63 billion deficit in
the first quarter, on a lower deficit on goods, Statistics
Canada said. Analysts had forecast a deficit of C$9.80 billion.
              
    Meanwhile, U.S. stocks rose as China sounded hopeful of a
resolution to the long-standing trade dispute with the United
states.             
    Canada is a major exporter of commodities, including oil, so
its economy could benefit from an improved outlook for global
trade.    
    The price of oil was supported by a sharp fall in U.S.
inventories. U.S. crude        prices were up nearly 1% at
$56.31 a barrel.             
    At 9:43 a.m. (1343 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3297 to the greenback, or 75.20 U.S.
cents. The currency traded in a range of 1.3274 to 1.3319.
    Canada's gross domestic product data for the second quarter
is due on Friday, which could help guide expectations for next
week's Bank of Canada interest rate decision. Analysts project
that the economy grew by 3%, recovering after a slowdown around
the turn of the year.
    Canadian government bond prices were higher across the yield
curve, with the two-year            up 0.5 Canadian cent to
yield 1.327% and the 10-year             rising 10 Canadian
cents to yield 1.112%.
    Earlier this month, the 10-year yield hit its lowest since
October 2016 at 1.083%.

 (Reporting by Fergal Smith; Editing by Andrea Ricci)
  
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