November 22, 2019 / 9:25 PM / 16 days ago

CANADA FX DEBT-C$ ends week lower as economic threat from rail strike builds

 (Adds dealer quotes and details throughout; updates prices)
    * Canadian dollar falls 0.5% for the week
    * Price of U.S. oil decreases by 81 cents on Friday
    * Canadian retail sales decline 0.1% in September
    * Canadian bond prices trade mixed across flatter yield
curve

    By Fergal Smith
    TORONTO, Nov 22 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Friday, unable to reduce
this week's decline as oil prices fell and a strike at Canada's
biggest railroad threatened to weigh on the country's economic
growth.
    The price of oil, one of Canada's major exports, pulled back
from two-month highs as concern over U.S.-China trade talks
overshadowed expectations that major producers would extend
production cuts. U.S. crude oil futures        settled 81 cents
lower at $57.77 a barrel.             
    "The Canadian dollar is following oil a little bit
directionally," said Rahim Madhavji, president at
KnightsbridgeFX.com.
    "Kind of lurking in the background, this whole CN Rail
strike ... the downside is if there is a prolonged strike there
could be a potentially more significant impact on the economy,"
Madhavji added.
    The strike at Canadian National Railway Co          was in
its fourth day on Friday with no sign of a deal between the
company and the workers' union.             
    TD Bank estimated that annualized economic growth for the
fourth quarter could be reduced by about 0.2% were the strike to
continue for another two weeks.
    At 4:00 p.m. (2100 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3290 to the greenback, or 75.24
U.S. cents. The currency, which traded on Friday in a range of
1.3255 to 1.3298, was down 0.5% for the week.
    The loonie had been on track to lose even more ground this
week before comments by Bank of Canada Governor Stephen Poloz on
Thursday that doused expectations for an interest rate cut as
soon as next month.             
    The decline for the loonie on Friday came as the U.S. dollar
       was boosted by data showing U.S. factory and services
activity quickened in November.             
    Domestic data showed that retail sales fell 0.1% in
September from August, matching estimates.             
    Investors have cut bullish bets on the Canadian dollar, data
from the U.S. Commodity Futures Trading Commission and Reuters
calculations showed. As of Nov. 19, net long positions in the
currency had fallen to 28,865 contracts from 42,373 in the prior
week.
    Canadian government bond prices were mixed across a flatter
yield curve, with the two-year            down 3 Canadian cents
to yield 1.58% and the 10-year             rising 5 Canadian
cents to yield 1.472%.
    Canada's housing market has turned the corner and prices
will increase modestly faster over the coming few years, a
Reuters poll of economists and property market analysts
predicted.             

 (Reporting by Fergal Smith; Editing by David Gregorio and
Marguerita Choy)
  
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