September 11, 2019 / 8:37 PM / 9 days ago

CANADA FX DEBT-Loonie pulls back from 6-week high as oil prices slide

 (Adds dealer quotes and details throughout, updates prices)
    * Canadian dollar falls 0.3% against the greenback
    * Price of U.S. oil decreases 2.9%
    * Canadian industrial capacity usage rose to 83.3% in Q2
    * Canada's 10-year yield touches a near six-week high at
1.442%   
  

    By Fergal Smith
    TORONTO, Sept 11 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Wednesday, pulling back from a
six-week high the day before, as oil prices fell and the
greenback broadly climbed.
    At 3:43 p.m. (1943 GMT), the Canadian dollar          was
trading 0.3% lower at 1.3194 to the greenback, or 75.79 U.S.
cents. The currency traded in a range of 1.3140 to 1.3215.
    Lower oil prices were "the main driver" of the Canadian
dollar, said Simon Côté, managing director, risk management
solutions, at National Bank Financial.
    There was no discernable impact from Wednesday's kickoff of
a six-week Canadian federal election campaign in which Prime
Minister Justin Trudeau's Liberals face a tight race.
            
    The price of oil, one of Canada's major exports, was put
under pressure by a report that U.S. President Donald Trump
weighed easing sanctions on Iran, which could boost global crude
supply at a time of lingering worries about global energy
demand.             
    U.S. crude oil futures        settled 2.9% lower at $55.75 a
barrel, while the U.S. dollar        climbed against a basket of
major currencies, including the euro, a day before the European
Central Bank is expected to add further stimulus in a bid to
boost the region's economy.                  
    Data from Statistics Canada showed that Canadian industrial
capacity usage rose more than expected to 83.3% in the second
quarter, adding to the batch of upbeat economic reports that has
helped boost the loonie by 0.9% since the start of the month.
            
    On Tuesday, the loonie posted its strongest intraday level
since July 31 at 1.3134.    
    "It feels here as if my (U.S.) dollar sellers, mostly
corporate, are sitting on long-dollar positions," Côté said. "If
that movement on U.S.-CAD resumes to the downside, at some point
somebody will have to sell more dollars ... that's where I think
the risk is of a bigger move."
    The loonie's gains this month have coincided with a rally in
global stocks         . In addition, the Bank of Canada last
week held its benchmark interest rate unchanged at 1.75% and
made no mention of future rate cuts despite easing this year by
many of its global peers, including the U.S. Federal Reserve.
            
    Canadian government bond prices edged higher across much of
the yield curve, with the two-year            up 2.5 Canadian
cents to yield 1.584% and the benchmark 10-year            
rising 10 Canadian cents to yield 1.418%.
    Still, the 10-year yield touched its highest intraday level
since Aug. 1 at 1.442%.      

 (Reporting by Fergal Smith; Editing by Nick Zieminski and Peter
Cooney)
  
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