October 8, 2019 / 7:24 PM / 11 days ago

CANADA FX DEBT-Loonie weakens as global growth fears grip investors

 (Adds strategist quote and details throughout; updates prices)
    * Canadian dollar weakens 0.1% against greenback
    * Canadian housing starts fall 2.5% in September
    * Price of U.S. oil decreases 0.2%
    * Canadian bond prices rise across the yield curve

    By Fergal Smith
    TORONTO, Oct 8 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Tuesday as investors worried
that trade talks this week between the United States and China
would do little to help the global growth outlook.
    U.S. stocks fell as hopes of progress in high-level trade
talks were dashed by a report Washington was moving ahead with
efforts to limit capital flows to China and the inclusion of
some top Chinese startups to a blacklist.             
    "The loonie is facing two battles, that's not just the
domestic economy and sustaining the growth, but it's also the
oil markets and how they're reacting to these growth fears in
global markets," said Simon Harvey, FX market analyst at Monex
Europe and Monex Canada.
    The price of oil, one of Canada's major exports, slid on
dampened hopes for a U.S.-China trade deal, although unrest in
Iraq and Ecuador lent some support to crude prices. U.S. crude
oil futures settled 0.2% lower at $56.23 a barrel.             
    At 2:57 p.m. (1857 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3319 to the greenback, or 75.08 U.S.
cents. The currency, which touched a one-month low last Thursday
at 1.3348, traded in a range of 1.3289 to 1.3336.
    The loonie lost ground even as data from Canada's national
housing agency showed that housing starts fell less than
expected in September, declining 2.5% from the previous month to
221,202 units.             
    Separate data, from Statistics Canada, showed that the value
of Canadian building permits rose by 6.1% in August from July.
            
    "Canada's housing sector is back on the front foot with
resales picking up as the year progresses and homebuilding
activity clearly displaying some momentum," Josh Nye, a senior
economist at Royal Bank of Canada, said in a note.
    Canada's employment report for September, due on Friday, can
help guide expectations for the Bank of Canada policy outlook.
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 2 Canadian cents to yield 1.449% and the 10-year
            was up 20 Canadian cents to yield 1.278%.

 (Reporting by Fergal Smith; Editing by Mark Heinrich and Peter
Cooney)
  
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